Home Depot puts an eco-friendly twist on trade-ins for holiday shopping

Retailers keep getting creative with old concepts to wrest money from reluctant consumers' pockets this holiday season. Now, Home Depot Inc. (HD) is putting an environmental twist on trade-in deals by offering to take back old power drills and Christmas lights in exchange for discounts on new, eco-friendly versions.

The hardware chain announced on Friday that from Nov. 5 to 15, customers can bring in old strings of lights and get a $3 off coupon for new LED lights -- which use 80 percent less energy than incandescent bulbs. And through Nov. 8, they can trade in old or broken drills for a 15 percent discount on new drills with lithium-ion batteries, which are supposed to be more energy-efficient and less polluting. Home Depot says it will recycle the old drills.

For Home Depot, it looks like a selfless, earth-aware promotion, a kind of "cash for clunkers" in the hardware and lighting aisles, but it's also a savvy way around a couple of recessionary shopping behaviors.

For one thing, as we've reported, customers aren't as willing to pay more for eco-friendly products during lean years. Just ask Whole Foods Market (WFMI) how it has made adjustments to shed its "Whole Paycheck" image.

Also, as we have heard endlessly since the back-to-school season, consumers are going out to shop less, spending less on each shopping trip and need a lot more incentive to open their wallets. So, stores have gone back to the tried-and-true: Lay-away, Christmas Clubs, and trade-in programs.

Trade-ins are one way to encourage people to buy new stuff because they get two benefits: a discount and the chance to get rid of the old stuff. Toys 'R' Us started out the holiday season by announcing offers to trade in old baby products and video games. The baby-product deal also had a virtuous twist, encouraging parents to get rid of potentially dangerous items that had been missed in product recalls.

Home Depot's green angle also throws in a virtuous twist for shoppers who need more encouragement this year than ever. If the latest surveys are to be believed, consumers plan to spend even less this holiday season than they did last year, and they're limiting themselves to gifts for family while cutting back on extras like decorating.

But merchants know that holiday shopping is all about sentiment and confidence. The former is usually abundant around the holidays, but with nearly 10 percent unemployment, there's little of the latter this year. Throwing a little goodwill to all shoppers into the mix might help shake a few extra dollars loose.

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