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Best Buy has made its new Buy Back plan, which we wrote about earlier, official. The plan allows buyers to trade in their televisions, laptops, netbooks, tablets, or smartphones for a percentage of the device’s original value.
Interestingly, when trading in a smartphone, Best Buy will base the percentage on the phone’s retail value. That means the program won’t use the subsidized price a consumer may pay for a phone with a contract, but rather the unsubsidized price a consumer would pay without one. This could help soften the blow of an Early Termination Fee (ETF), and Best Buy admits it could even mean a tiny profit for a consumer in rare cases.
In order to utilize the Buy Buy program, a consumer must first “buy into it” at the time of purchase. That means he must pay a fee, ranging from 69.99 for portable laptops, netbooks, and tablets, from $39.99 to $59.99 for cell phones and smartphones, and from $59.99 to $349.99 for televisions.
The refund, payable in Best Buy gift cards, is as follows. For items aside from TVs, the maximum repayment is 50 percent of the original purchase price if the items are returned within six months of purchase. The rate decreases from there to 40 percent within 12 months of purchase, 30 percent within 18 months, and 20 percent within 24 months.
TVs are treated differently, as one might expect, due to their price and expected lifespan. TVs can be returned for up to 48 months after purchase, but only for up to 10 percent of their original price.
Naturally the items must be in good working order. Also, they must be returned with all original parts, including chargers and cables. While Best Buy will recycle and resell the returned devices, it won’t stock them in its stores, but instead may use some for parts for refurbished items or sell others in online auctions through its subsidiary Dealtree.
It’s true that consumers may actually be able to do better by reselling the devices through eBay or other market, but Best Buy is betting the program will do well because it’s easier to return a device to a store than set up an auction and deal with it.
Best Buys’ press release is below.
Buy Back Program from Best Buy Helps “Future-Proof” Today’s CE Purchases
Customers can buy new gadgets with added confidence from an upfront re-purchase schedule, instant re-payment on redeemed gear
MINNEAPOLIS–(BUSINESS WIRE)–Today Best Buy (NYSE: BBY) is launching its first-ever Buy Back Program to help customers embrace new technology with greater confidence. Created for people who want to stay current with their gear but who are concerned about obsolescence, the Buy Back Program provides convenient access to upgrades with the help of a Best Buy gift card from ”buying back” past purchases.
“We recognize that technology is changing faster than ever, and our customers tell us they want to enjoy these devices without worrying about when the next or newest version will launch”
Beginning this month, Best Buy customers can purchase the Buy Back Program in-store or online when buying products in one of five popular categories: laptops, netbooks, tablets, post-paid mobile phones and televisions. Customers may purchase the Buy Back Program when they buy their new devices, with pricing based on the product category. For example, Buy Back protection for any laptop, netbook or tablet is $69.99. Best Buy will purchase the product anytime within two years for laptops, netbooks, tablets and post-paid mobile phones, and four years for televisions. Customers may receive up to 50 percent of the product’s original purchase price paid in the form of a Best Buy gift card if redeemed within six months of the effective date to purchase new products of their choice.
Buy Back Program appeal has been validated by a year of extensive consumer research, and most recently in a study conducted by Impulse Research Corporation. In the study, 40 percent of consumers surveyed agreed that concerns about technology becoming outdated have likely prevented them, or would prevent them in the future, from purchasing products such as laptops, mobile phones, TVs, tablets and netbooks. The study also affirmed the appeal of a Buy Back-like program when deciding on where to shop for popular electronics gear in the coming year. It revealed that 30 percent of consumers plan to purchase a TV or laptop in the next 12 months, and that 73 percent of consumers would consider purchasing these electronics from a retailer that offers a re-purchase type of program.
“We recognize that technology is changing faster than ever, and our customers tell us they want to enjoy these devices without worrying about when the next or newest version will launch,” said Brian Dunn, chief executive officer of Best Buy. “We call this ‘future-proofing’ because our customers can now have more confidence that they’re protecting the value of the products they’re purchasing today. With the Buy Back Program, consumers benefit from assurance, convenience and transparency so they can stay current and stay connected.”
Best Buy customers may purchase the Buy Back Program when buying a new product and redeem it at a later time, as long as the device is in good working condition and includes all original parts. Unlike typical retail trade-in programs customers don’t have to wait for re-payment, and can immediately apply money from their Buy Back product redemption to the purchase of new products at any Best Buy or Best Buy Mobile store. Better yet, consumers know what they’ll be paid up front, with a schedule that is available at the time of Buy Back Program purchase and is based on duration of product ownership:
- Redeem your Buy Back within 6 months from purchase effective date, and get up to 50 percent of your purchase price
- Redeem your Buy Back after 6 months to 12 months from purchase effective date, and get up to 40 percent
- Redeem your Buy Back after 12 months to 18 months from purchase effective date and get up to 30 percent
- Redeem your Buy Back after 18 months to 24 from purchase effective date and get up to 20 percent
- For TVs only, redeem your Buy Back within 48 months from purchase effective date and get up to 10 percent
“A program like Best Buy’s Buy Back should encourage higher consumption by early adopters and fast followers that are considering new technologies, because it gives them confidence that the electronic devices they have just purchased will have real value going forward,” said Stephen Baker, vice president of industry analysis for NPD Group.Impulse also found that when purchasing personal electronics, 84 percent of consumers say it’s important to deal with a reputable company who will responsibly re-use and re-cycle their old products. Electronics redeemed through the Buy Back Program will be assessed by its built-in team of Geek Squad Agents, and distributed among Best Buy’s aftermarket, trade-in and recycling programs. To learn more about the Buy Back Program and find the nearest Best Buy store, visit www.bestbuy.com.