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New cash for your old technology

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By Mike Musgrove
Sunday, December 27, 2009

Now that the gift-giving holidays have passed, 'tis inevitable that last year's now-obsolescent gadgets end up forgotten inside a closet or a desk drawer. Or worse still, in a trash can on the way to the local landfill.

But for folks looking to recoup a few dollars from their tech-buying habits, it doesn't have to be that way, thanks to a handful of online services, such as Gazelle (http://www.gazelle.com) and YouRenew.com, that offer to pay a few bucks for last year's iPod or BlackBerry. Log on, answer a few questions about the condition of your old digital camera, phone or music player, and you'll get an automatically generated cash offer, tendered as quickly as your browser window takes to refresh.

If you take the option to send that old gadget in, it's likely to be refurbished and resold on Amazon.com, Overstock.com or eBay. Both Gazelle and YouRenew offer free shipping and, in a gesture of environmental do-goodery, will take items even if they don't have monetary value, with a pledge to dispose of them in an environmentally friendly manner.

For such services, this is one of the busy times of the year, because the consumer tech industry makes its biggest sales around the holidays. The last six weeks of the year account for up to 40 percent of a gadget's sales, said Stephen Baker, an industry analyst with research firm NPD. While that means a lot of kids will be getting Dad's old iPhone, it also means forced retirement for plenty of still-functional gadgets.

Kristina Kennedy, a spokeswoman for Boston-based Gazelle, said that her company is aiming to change the thought process of consumers, in a way that takes into account the bigger picture when buying a new device.

"We want the consumption of electronics to be more like buying a car," she said, pointing out that half of today's new-car purchases involve the trade-in of an older model. In order to expand, Gazelle has worked with retailers to launch buyback programs at bricks-and-mortar stores such Costco and with the online divisions of WalMart and Sears. "When you buy a laptop, you don't really consider what it will be worth in three years," Kennedy said. "We want consumers to start thinking about that."

Although a shopper could make a few more dollars by selling an old gadget on eBay, Kennedy said, Gazelle's customers use the service because they prefer an instant offer and don't want the hassle of dealing with auctions. Gazelle says it erases the data on all the devices it receives, which is not something that some consumers confidently know how to do with, for example, a cellphone.

Business is on the upswing for Gazelle, which was launched in 2006 under the name SecondRotation. This time last year, the site was taking in about 5,000 items a month, and this year that figure has tripled.

Bob Casey, one of two Yale students who launched YouRenew this year, says that his company's major task is to spread the word about the service. By Casey's figures, only about 10 percent of electronics are recycled properly, so there is plenty of room for growth just by getting college students and young professionals to clean out their desk drawers.

You may be wondering right about now, just what is that old iPod or BlackBerry worth?

Take a cutting-edge "fifth-generation" iPod from a few years ago; Apple introduced an 80-gigabyte version of the player in 2006 for a price of $349. On a recent afternoon, Gazelle offered $53 for the device, compared with a $20 bid from YouRenew. A newer BlackBerry device, the Pearl Flip 8220, was released last year and won offers of $73 at YouRenew and $40 at Gazelle. Both services, naturally, reserve the right to adjust their offer if a device turns out to be in worse shape than advertised.

To be sure, selling on eBay is a way to squeeze a few more dollars out of last year's gadget. As I write this, an eBay auction with that same iPod is coming to an end with a closing price of $70. As for that BlackBerry, the going rate is in the neighborhood of $100.

Baker said he's skeptical about the ability of buyback sites to break in to a mainstream consumer audience, because of the rate at which computers and gadgets depreciate. After all, $53 might not seem like a lot of money for what used to be a $349 device. "Tech products lose their value very rapidly," he said. "The people who want to get rid of those things want to get back a lot more than they're actually worth."

Indeed, it's the fast-moving early adopters who tend to get the most money out of such a site. D.C. resident Omar Williams used YouRenew to trade in his old iPhone when he traded up for a brand-new "3G S" iPhone this year. YouRenew sent him a check for $250 for the old phone, which Williams figured to be a "pretty good chunk of change" that helped pay for the new device.

And it's not just about the money, some customers say.

Georgetown student Leslie Hotchkiss recently got $21 for her old graphing calculator, a gadget she had to buy for about $90 to use in a high school class. College students don't have a lot of space or a lot of money, she pointed out. They also tend to care about the environment. YouRenew fits in pretty well with those values.

"I was surprised I could even get any money for it, it was so old," she said, but mainly she was glad to know the thing didn't end up in a landfill. Now she's got her eye on unloading a pesky printer that's starting to act up.


© 2009 The Washington Post Company

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