When we first broke the news about Best Buy’s new buy back program, we hypothesized that it probably wouldn’t be the wisest investment you could ever make. Now our labcoat-loving cousins at Consumer Reports have confirmed our suspicions.
CR uses the example of a $1,600 TV to see how the program would work. First, it will cost you $180 just to purchase the “protection” for a TV in that price range.
Then, if you decide to turn in the TV at some point between 12-18 months after purchase, the absolute maximum you will receive is $480. Subtracting out the cost of the plan, that means that you’d only receive $300 (18.75%) of the TV’s original purchase price.
And we can’t stress enough that this is a maximum amount and that the amount of the buy back is determined by the company’s assessment of the TV’s condition. If it’s deemed to be in poor condition, you’ll only receive a maximum of $240 back, meaning you’d only net $60 — and you’d get that in the form of a Best Buy gift card.
The buy back program will actually lose you money if you hold onto that TV until the 48-month limit. At that point, the absolute maximum buy back for that TV set will be $160. So your best case scenario is that you’d only lose $20.
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…
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.
Best Buy’s “Buy Back” program: Not such a great deal [Consumer Reports]