The Buy Back Program at Best Buy: Is It Worth it?
The program, which requires a one-time fee of $69.99 per gadget (the program is free this week only), allows users to resell electronics that are in good condition, offering a set, guaranteed payback for trade-ins. While the ability to resell gadgets is not new -- sites like eBay are where they are today thanks to consumers reselling their electronics, and there are plenty of third-party resellers that pay cash for your outdated laptop, phone or TV. What is new is an electronics retailer that makes the resale process part of the purchase price.
But is an investment in the Best Buy Buy Back program, really worth it? Here are 10 things you should consider.Depreciation Is Key
Let's start with an example of the new 11-inch Apple MacBook Air. This ultra-thin laptop retails for $1,199. If you decide that you'd like to protect your investment by adding the Buy Back program, you'll be charged $69.99. Your total bill for the MacBook Air and the Buy Back program will be $1,268.99, plus tax.
Once your Buy Back plan goes into effect after 31 days, your $1,268.99 investment is only worth $599.50, or just 50% of the original purchase price of the product. Deduct the fee for enrolling the product in the program, and you'll end up with just $529.51. If you buy a new product and add the Buy Back program to that, your enrollment fee is waived, saving $69.99.
The Best Buy Buy Back program site has a simple calculator to determine how much you'll get back. You start off with 50% in the first six months, down to just 20% after 18-24 months. TVs get a little extra time to be resold, but in their final 24-48 months, you'll only get 10% of the purchase price back.
Refund Is Provided as a Gift Card
This one is obviously key to Best Buy -- when you return your product, the retailer hopes you'll buy the latest version of the product, or upgrade to something even nicer. This explains why you can only get your Buy Back investment returned as a gift card. The plan and gift card mean you are locked into using Best Buy as your electronics retailer. If the "newest" product is not sold at Best Buy, or is sold at a premium compared to other retailers, you may have no other option than to hold onto that gift card.
Product Must Be in Good Condition
During the months you use your product, you'll obviously take very good care of it, which is just as well. When you return the product to Best Buy, they'll expect a product in "excellent" or "good" condition.
A couple of scratches are fine, but any minor damage or deep scrapes will deduct another 50% from the amount they'll pay you back. In other words -- return your $1,268.99 MacBook Air in less than "good condition", and you'll only get $299.75 back in the first six months, or $179.85 after a year.
Product Must Be 100% Complete
When you return your Buy Back product to the store, anything missing from the original box will lower the amount you'll be paid. Retailers like Best Buy are notoriously stingy with this -- so be sure you keep every single cable, DVD or manual that came in the box. The last thing you need is to lose out on another $100 just because you lost a $5 network cable.
Mobile Phone Sales Do Not Cancel Your Contract
This one may make perfect sense to most people, but if you purchase a new mobile phone and add the Buy Back program, you can resell your phone for the full unsubsidized prize. Problem is, even when you sell your phone back to Best Buy, your mobile operator will keep sending a monthly bill for the duration of your contract.
A good example is the Apple iPhone. If you purchased a new 32GB iPhone 4 with the Buy Back program, you'll pay $299.99, plus $69.99 for the Buy Back program. Return it within six months, and the phone is only worth $350, half of the $699.99 unsubsidized price.
Sadly, since you are still in contact, any new phone you buy will also be unsubsidized, which puts it around that same $700 price point. Paying $350 to get the latest and greatest phone every six months is a pretty pricey hobby. Popular phones like the Apple iPhone depreciate very slowly, so this is a great example of a product that is much more profitable to resell outside the Buy Back program.
Keep Your Eye on the Calendar
Knowing exactly when to take advantage of the Buy Back program is a tricky one. The initial six-month period starts 31 days after you buy the product. That initial period will pay 50% of your purchase price. Wait one day too long, and that drops to 40%. Thirty one days plus 1 year into the program, and the return is only 30%, which is almost not worth the trip back to the store.
If you are buy an item with the intention of returning it under the Buy Back program, make sure to keep your receipt, and mark return dates on your calendar.
Take Care of Personal Data
Part of the Best Buy Buy Back program includes wiping personal data from any products you return. Sadly, once you hand over your product, you have no way to verify this actually took place. All it takes is one failure in the return protocol and you could become the next victim of identity theft.
Especially with smartphones and laptops, the amount of personal information is staggering. Before reselling anything that contains personal data, consult the user guide of the product on the best way to fully wipe its storage.
Third-Party Sales Are Worth a Lot More
If you search eBay or Craigslist for recent sales of the same MacBook Air we used in the examples above, you'll see that a three-month-old version with the exact same specifications sells at an average of $1,100.
Based off the retail price, this is a depreciation of just 9%, compared to 50% when selling through the Buy Back program. This eBay example does not take into account the eBay and PayPal fees, which can add around $50 to an $1,100 transaction.
Green Is Good
In this day and age, it does pay to be environmentally conscious, and returning your electronics to the store for a partial refund means less electronics sitting around doing nothing, and less electronic waste in landfills.
Best Buy will clean up all products it receives through the Buy Back program, which also means wiping your personal data off a phone or laptop. Even if you only end up with a 20% return on your investment, it beats the alternative.
When Does the Buy Back Program Make Sense?
Reselling items through eBay or Craigslist is obviously not without its risks, and the hassle involved with photographing and listing your items may not be worth it.
When dealing with consumer electronics, you also run the risk of non-paying customers, charge-backs or other nastiness. With Craigslist, your risks are reduced, but you may still find yourself in a dark parking lot waiting for someone to show up with a wad of cash.
If you purchase your electronics fully expecting them to depreciate 50% as soon as you leave the store, and you don't have the time or energy to resell them, then the Buy Back program is perfect for you. It is painless, all done in-store, and allows you to continue upgrading your products for a 50% surcharge every six months.