If you watched Super Bowl XLV, you may have seen Best Buy's commercial for its Buy Back program, which lets you trade in older gear purchased at the chain for newer stuff.
Right now the program is free, but after this Saturday you'll have to pay an upfront fee to participate. So of course we wanted to see if it's a good deal for consumers.
Our verdict: It's not.
The concept of trade-ins isn't a new one; there are several third-party companies that will accept used goods and pay you a fee. Although most of the major ones, such as Gazelle.com, don't yet accept TVs, some do. TechForward offers a plan very similar to Best Buy's, and another site, CEXchange, lets you enter a TV's make and model number to get an estimate as to its trade-in value. Best Buy previously ran an electronics trade-in program, but it didn't include TVs. In fact, its new Buy Back program isn't run by Best Buy itself, but rather by Chartis WarrantyGuard (CWG), a third-party company that administers extended warranty plans.
But when you look at the fine details of the Best Buy program, it's not likely to make good economic sense for most of us. In many cases, the cost of the plan will exceed the trade-in credit you'll receive. The HD Guru website did a nice job of breaking down the terms of the deal, but in a nutshell here's how it works.
To begin with, you pay an upfront fee: $60 for TVs that cost less than $500, $100 for sets priced at $500 to $1,199.99, $180 for models that cost $1,200 to $2,499.99, and $350 for TVs priced between $2,500 and $5,000. You have to bring the TV into the store to trade it in, and all payments are made via a Best Buy gift card—you can't get back cash you can spend elsewhere.
How much you'll get back depends how long you've owned the TV, and the condition in which it is received. The TV will have to go through "acceptance testing," where the TV's condition will be "graded." Details of the plan give CWG—at its "sole discretion"—the right to adjust the Buy Back amount based on its assessment. Here's the table from Best Buy's terms and conditions that shows the sliding scale of what you can expect to receive based on the TV's date of purchase and its deemed condition:
SCHEDULE OF BUY BACK AMOUNT AS ADJUSTED TO ACCOUNT FOR ACCEPTANCE TESTING*
| TVs, Laptops, Tablets & Mobile Phones | TVs Only | ||||
| Acceptance Testing Condition Grade | 6 Months from Effective Date | After 6 Months to 12 Months from Effective Date | After 12 Months to 18 Months from Effective Date | After 18 Months to 24 Months from Effective Date | After 24 Months to 48 Months from Effective Date |
| Good or Fair | Up to 50% | Up to 40% | Up to 30% | Up to 20% | Up to 10% |
| Poor | Up to 25% | Up to 20% | Up to 15% | Up to 10% | Up to 5% |
| Substantially Impaired | |||||
Credit: Best Buy
* The Buy Back Amount is expressed as a percentage of the Original Purchase Price of the Device. The Buy Back Amount may be reduced from that listed in the schedule due to missing or inoperable accessories or included items, as provided for in the paragraph below.
So under this plan, we decided to see what we'd receive if we brought in a 46-inch Samsung LCD TV (UN46B6000), purchased in December 2009 for $1,600. If the TV was in good condition, we could receive up to $480, although as HD Guru points out the term "up to" is somewhat vague, and it's left to the discretion of CWG. But if the TV is deemed to be in poor condition, the most you'll get back is $240. In both cases you'd have to subtract the upfront cost of the plan—$180—from the amount to see what you'd net. Under the best-case scenario the amount is $300, but it's only $60 if the TV is deemed to be in poor condition. A quick check on eBay shows a few of these sets selling from $500 to more than $1,000. It's likely you can do much better using craigslist—we saw one locally listed for $650—where you don't have the hassle of shipping (though having a stranger come pick up the TV isn't everyone's cup of tea).
Since Best Buy's program is remarkably similar to the one run by TechForward, we compared the programs based on that same 46-in Samsung LCD set.
| Best Buy | TechForward | |
| Plan cost | $180 | $150 |
| Buy back | 30% (max) | 30% (max) |
| Buy Back | 15% (max) | 15% (max) |
| Dollar amount | $480 | $480 |
| Payment | Best Buy card | Store credit/rebate |
One difference is that you have to ship the device back to TechForward, although they'll send you a prepaid postage label along with a box and appropriate packaging materials—but you have to ask for it. With Best Buy's plan it's your responsibility to get the TV to the store. TechForward's plan is less expensive, but you may find that the convenience of being able to deal with a local Best Buy is worth the extra $30.
But the bigger issue is whether the prepaid buy back concept is a worthwhile one. For most of us, I don't think it is. For one, you're prepaying for a service you might never use. For another, unless you plan to buy a new TV every six months, the amount you'll receive isn't likely to be meaningful. For example, if you keep your TV for two years, in the best-case scenario you'll only get up to 10 percent of the original purchase price, and after four years you'd get nothing. So in the case of the Samsung set, after two years you could receive a maximum of $160, but you'd have paid out $180, for a net loss of $20.
To us, this plan seems more like a way for a retailer to add a higher-profit item to a low-margin sale than a great way for consumers to get a break on new gear. And it will make even less sense after Saturday when the program is no longer free.
—James K. Willcox
