Buyback Insurance: A Good Deal for Retailers.

Today, I went back to the Bloomberg Businessweek website and came across this article. Many people may be familiar with the Buyback Insurance. Best Buy, the world's largest electronices retailer, started its own buyback program sometime earlier this year. The insurance normally works like this: for an upfront fee, the retailer agrees to buy back an old device for up to half its original cost when a customers returns it within a few years. Office Depot and Radioshack has offered buyback insurance for the last few years now.

TechForward, the Los Angeles startup that offers buyback insurance through Walmart, disagrees that this program can be profitable. Marc Lebovitz stated that "we are giving people a solution that makes upgrading more affordable and environmentally friendly." He is the company's chief operating officer. Sean Stephens who is the senior director of Best Buy services said that the insurance "appeals to people who see value in knowing what they'll get back when they redeem their device." TechForward began offering the plans in 2006, but it didn't sign its first big customer until 2008. However over the last two years, large retailers like Office Depot and Dell have began offering TechForward's plans. Consumer advocates say that the buyback insurance is a bad idea.
I personally don't know much about the buyback insurance program. I have heard about it over the last year or two though. I have heard both bad and good things about the program.

http://www.businessweek.com/magazine/buyback-insurance-a-good-deal-for-retailers-07282011.html