Refurbished and Repaired: In the Recession, Computers Live Longer

Even in this tough economic climate, Americans are spending money on computers. Before the recession, owners with slow or outdated computers were apt to just junk them and get new ones. But cash-strapped consumers are increasingly opting to repair their computers or replace them with secondhand models.

Owners are beginning to treat computers like the family car, keeping them as long as possible to get as much mileage as they can from their equipment. And as people try to extend the lives of their computers, the mom-and-pop stores that specialize in refurbishing and repairs are thriving.

For example, Denver-based Action Computers is enjoying soaring demand for computer repairs at its main store. The shop has seen a 15% increase in these repairs, compared to its previous all-time high of about nine years ago, and it has hired more technicians to keep up with demand, says Action Computers owner Mark Hope.

Most Popular Fixes

The most common repairs? Computer virus and parasite removal, Hope says, adding that equipment tuneups also are popular. "When somebody brings a computer in and wants to make it go faster, we blow it out for them," he says.

Along with making sure a computer's essential cooling systems are working properly, Hope also recommends bulking up a system's memory. "RAM is cheap right now," he says. "If you double your RAM and remove the viruses and parasites and clean some of the junk out of the startup menu, then they're good to go."

A typical customer can spend $90 to $130 to get a weary computer working up to its full capability, Hope says, which is much cheaper than buying a new computer.

But sometimes an upgrading and cleaning may not be enough. For example, replacing a computer's CPU, or central processing unit, isn't always an option. "It's like taking the engine from a brand-new car and trying to put it into your '95 Subaru. Some things just don't work right," says Steve Sandau, an information technology administrator at Wright Express in Portland, Maine.

Secondhand Savings

In those cases, customers are increasingly turning to refurbished computers instead of new ones. Many customers who previously bought custom-built, expensive new machines are now buying used computers, Hope says.

But while his stores are selling more inexpensive machines, compared to the higher-end models, they also have attracted more customers. "We've found that we're working a lot harder to garner the same dollars, but we're doing well," Hope says. "Our customer base has grown by about 40% [since the start of the recession in 2008] because people need a deal."

A refurbished computer can sell for up to 50% less than a new one. A recent study by the Refurbished Computer Initiative at TechSoup, which has been tracking the price of refurbished computers since 2005, found that a three-year-old Dell Optiplex computer sells for between one-half to one-third of the price of a new one.

As Sandau puts it: "A refurbished machine gives you the advantage of a warranty, and it gives you something relatively new -- and not at top-dollar."

He says a properly refurbished computer might make even more sense for the office than for the home. "For the most part, office and home [systems aren't] that much different," he says. "But at home you may actually be demanding more from your computer, in particular for gaming."

Big Retailers Join the Trend

A number of electronic retailers are also benefiting from the growing market for refurbished computers. Both Staples (SPLS), the office-supply giant, and Best Buy (BBY), the electronics retailer, offer refurbished desktop and laptop computers.

Staples won't say how much of its sales come from refurbished equipment, but it has increasingly emphasized the segment over the past few years. Aside from offering discounts, it also pushes sales by marketing its refurbished products as eco-friendly because they're recycled instead of trashed.

"Whatever you're looking to do, whether you want a refurbished computer or a new computer, now is a good time to do it," says Sandau. "The fact that the big-box retailers are getting into refurbished machines means there is a real market for those machines. And because of retailers' reactions to the poor economy, now is a good time to buy pretty much buy any kind of computer gear -- new, refurbished or parts."