The consumer retailer Best Buy has found a way to lock customers into tighter relationships. The company’s rewards program may no longer the attraction it once was, so the company is introducing a benefit that will encourage shoppers to come back to the store. It also encourages the product upgrade philosophy, something that cell phone service providers have taken advantage for years. Consumers increasingly want the latest versions of everything. It may have slowed during the recession, but in general, Americans are willing to spend their disposable income on things, particularly technology, that becomes outdated very quickly.
Like Verizon’s “New Every Two” discount, Best Buy wants customers to upgrade their equipment frequently. The 42-inch LCD 60Hz HTDV was state-of-the-art and perfectly reasonable when I purchased it, but technology improves are increasing speed and frequency. Leaving the size of the television out of the picture, 120Hz gained popularity soon after I purchased the set. Technology shifted from cold cathode fluorescent lamps to LED for the screen’s backlight, saving more energy and providing a slightly better picture. Now the new televisions have incorporated 3D technology and offer 240Hz for non-3D content. Televisions also now come with apps and connect to the internet to stream movies from Netflix without a separate device. (Yet no television seems to come with a decent pair of speakers.)
I don’t know anyone who upgrades major electronic equipment as often as they upgrade cellphones, but Best Buy’s new Buy Back Program created an incentive for their customers to “trade up” at least every four years for televisions and at least two years for other electronic equipment covered by the program: mobile phones, laptops, netbooks, and tablets. The program works by trading in the equipment you purchased for a credit valued at a certain percentage of your purchase price, and that percentage is based on a time window.
- From one month to six months after your purchase, you can return the product for a 50% credit of the purchase price.
- Up to twelve months, the credit is 40%.
- Up to eighteen months, the credit is 30%.
- Up to twenty-four months, the credit is 20%.
- For televisions only, up to forty-eight months, the credit is 10%.
Furthermore, when you return the equipment and trade it in for the credit, Best Buy will judge its condition. It must be rated “good” or “fair” to receive the full credit; if the product is in “poor” condition, the credit will be reduced by 50%.
This program is not automatic. You pay a fee to take advantage of this offer, and it’s not clear what the fee is from the materials I’ve reviewed so far. Like an extended warranty plan, Best Buy is counting on a certain percentage of customers paying the fee to join the Buy Back Program for their purchase and never trading in the product.
This could be a good way for people who are already addicted to technology and know they are going to upgrade their equipment within a few years, but that addiction never pays off in the end. If you have enough disposable income, all you really need to know is the cost of the program and whether you can get more for your money by selling your old equipment yourself. The fee is an important missing piece of information. Don’t forget that Best Buy’s prices are often, but not always, higher than other prices for the same product from retailers like Amazon.com and other online electronics dealers.
Personally, I won’t be joining this program. While I have upgraded my phone every two to three years recently, I don’t see the need to do the same for other technology that’s covered under Best Buy’s Buy Back Program. I don’t think it’s a good idea for someone who is not in the habit of replacing their equipment to buy the newest technology to start down that path.
Updated June 13, 2011 and originally published February 3, 2011.