NEW YORK (Dow Jones)–Retailers are increasing their trade-in programs for used electronic devices this holiday season as they try to attract more cost-conscious shoppers.
Best Buy Co. (BBY) has allowed its Web site visitors to swap old but functional iPods, computers, PDAs and other electronics in exchange for credit on a gift card. The retailer is now rolling out an in-store trade-in program.
Sears Holdings Corp.’s (SHLD) Kmart chain is testing a program that allows customers to hand over gadgets, as well as DVDs and Blu-Ray discs, in its stores for credit on a gift card.
“Consumers are being very careful with their spending due to the current economic state so incentives that would encourage people to trade in their electronics makes a lot of sense,” said Tom Coughlin, chairman of the 2011 IEEE, the world’s largest technical professional association. “Anything that the merchant can do to help the customer justify the spending will encourage people to spend.”
Already, 80% of adults plan on buying some type of electronic product this holiday season, according to a survey conducted by the Consumer Electronics Association. As many consumers crave the newest and best gadget, electronics trade-ins are the “perfect way for the consumer to more easily afford a new piece of equipment,” while being environmentally aware, said Kevin Winneroski, vice president of secondary markets at Best Buy.
Best Buy, which started its electronics trade-ins in 2007, is now rolling out its in-store programs. Customers can go to the store to trade-in electronics purchased at Best Buy, no longer having to mail in the products and wait for gift cards.
DealTree.com, which Best Buy acquired in 2008, is handling the online trade-ins.
Year to date, Best Buy has processed more than 35,000 trade-ins between its online and in-store programs, and returned to consumers more than $1.4 million, or an average of $40 per item. Dell Inc. (DELL) and eBay (EBAY) also work with Best Buy’s DealTree.com.
Sears launched on Nov. 11 a trade-in program with Gazelle.com, an e-commerce company. Customers can hand over old gadgets and get a Sears gift card within seven days. Costco Wholesale Corp. (COST) and Wal-Mart Stores Inc. (WMT) both partner with Gazelle.com.
Since 2007, 50,000 consumers have used Gazelle to “reCommerce” more than 100,000 products and recycle thousands more. The company expects a 300% increase in annual growth in 2009.
“With this program, Sears customers will now be able to turn last year’s cell phone into this year’s holiday gifts,” said Israel Ganot, CEO of Gazelle, in a press release. “That is what reCommerce is all about. Redefining consumption by rewarding consumers for responsible consumption behavior.”
KMart’s program allows people to bring in DVDs, Blu-ray discs and other items for an instant gift card, said Karen Austin, senior vice president and president of home electronics at Sears Holdings. Austin was unable to provide exact numbers on the Sears and KMart programs.
Each day, Americans throw out more than 350,000 cellphones and 130,000 computers, making electronic waste the fastest-growing part of the U.S. garbage stream, according to Gazelle.com.
As a result, more companies are getting in on these programs. Target Corp. (TGT), Amazon.com (AMZN) and J&R Music & Computer World all work with NextWorth.com. For example, on NextWorth a consumer can recycle a like-new iTouch 8GB for $88, or an Apple MacBook Pro Intel Core 2.4Ghz for $334, if in good condition.
“People continue to look for value as they shop this holiday season,” especially since many are more strapped than they have been in the past, said Kleinberg