How Refurbished Electronics Work

Many people are unsure whether to buy refurbished electronics or buy new. See more laptop pictures.
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You'r­e a student in need of a new computer. That old desktop you've had for three years is just too slow to keep up with the pace of progress. So you're looking to buy. You've got a little cash, but you have your eye on a nice laptop that costs more than your budget would normally allow. You're about to settle for a machine with a slower processor and a little less memory, when you spot a listing on the manufacturer's Web site. It says: "Refurbished Computers."

Following the link takes you to a page where you see the machine you want -- it's $400 less than a brand-new machine. Great! You should be able to get it with your next paycheck! But wait, the listing says that it's refurbished. What does that mean?

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That depends on whom you ask. The electronics industry as a whole doesn't have an official definition for what it means to be refurbished. To refurbish something means that it's been renewed or updated in some way, and in general, that's true for electronics. Perhaps an item had a bad circuit board, or the glass face on a music player got scratched and it's been replaced, but in some cases, a refurbished item may have had its packaging damaged badly in the process of getting it to the store. The item inside may be just fine, but the retailer may have decided to send it back for repackaging. Or it's possible that the shipping box could be opened and retaped.

The one thing the label means with any certainty is that a refurbished item can't be sold as new. Because of that, and possibly because of the ambiguity of the "refurbished" label, consumers often shy away from buying refurbished products, even when they may be perfectly fine.

­So what should you do? You could get your computer now and use the extra money for something else. Or will you just have to send the machine back after you've had it for just a few days? The decision you make just may have global consequences. Read on to learn more.

Advantages of Refurbished Electronics

Used televisions and computer monitors pile up at a recycling center in Norway. Americans junked almost 3 million tons of electronics in 2006.
Used televisions and computer monitors pile up at a recycling center in Norway. Americans junked almost 3 million tons of electronics in 2006.
Johner Royalty-Free/Getty Images

You've chosen to think on it and maybe get a little advice. Your environmentally conscious friend tells you that buying refurbished is the way to go. Why is that? By giving their products an update, electronics manufacturers can keep electronic waste out of landfills.

Electronic waste is a growing problem worldwide. People in the United States threw away almost 3 million tons of electronics in 2006. Those machines carry lead and other toxic materials, which are health hazards, but they can also contain gold, silver, copper and even platinum [source: The New York Times]. Recycling efforts have been slow to take off. Groups like the Electronics Takeback Coalition promote education of hazardous substances in electronics and programs in which manufacturers recycle the goods they sell.

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Other organizations take electronic waste and make good use of it. Some schools and nonprofit groups accept empty printer cartridges, which they turn in for fundraising. Companies such as Funding Factory recycle empty cartridges and give rewards, such as school supplies, classroom tools and electronics. Rather than simply turning in their own, some groups solicit empty cartridges from others to help raise additional rewards points [source: The New York Times].

One problem that fuels the electronic waste boom is the constant release of new products into the consumer stream. For example, around 16 new cell phone models come out every month in the United States, making it easy for people to replace their phone. Iain Gillott, president of wireless analyst group iGR, believes 50 to 60 percent of cell phones are replaced because people get tired of the design [source: The New York Times].

Collective Good is a nonprofit organization that collects used cell phones and accessories, refurbishes them and sells them in developing countries where wireless phones are catching on quickly, thanks to difficulties in installing land-line infrastructure. When someone donates a phone, he or she can designate a charity to which the organization can donate a portion of each phone's resale or recycle value [source: Collective Good].

By reusing or recycling these phones, Collective Good keeps toxic materials in phones, such as lead, cadmium, beryllium, mercury and arsenic, from entering the environment [source: Grist].

Like a lot of other electronic waste, many used and broken cell phones are shipped overseas where the labor is cheap and so are cell phone replacement parts. There, shipping containers of old phones are taken apart and refurbished -- some of them in factories, others in booths at the village market [source: The New York Times].

Even with the growing numbers of cell phones recycled or refurbished in the United States each year, there are far more that are just sitting around. ReCellular, the largest cell phone recycler in the country, estimates that only about 10 percent of cell phones are being recycled. Many more are sitting on shelves or in drawers, unused. While it may not seem like it costs anything to leave the cell phone inert, there's an environmental cost to even that: According to Earthworks, an environmental group focusing on mineral development, mining gold for a circuit board of just one cell phone creates 220 pounds of waste [source: The New York Times].

­Everything seems great now -- you want to order that refurbished computer now, don't you? But you still can't get that question out of your head: "What will I do if something goes wrong?" Don't worry too much. That's only one of the obstacles in bringing refurbished electronic products back to market. Read more on the next page.

Market for Refurbished Products

If you've ever visited a used car lot, you've shopped for refurbished products. Like used cars, used electronics have to be evaluated to make sure everything is in working order before it can be used again.
If you've ever visited a used car lot, you've shopped for refurbished products. Like used cars, used electronics have to be evaluated to make sure everything is in working order before it can be used again.
Erik Rank/Photonica/Getty Images

Refurbishing and selling electronic products back on the market can make an environmental impact, but it makes little difference if no one buys it. You've already discovered one of the biggest problems with refurbished products, the label itself. Think back to the last time you saw the term "used cars" at your local dealership. Has their signage been changed now, to "certified used cars," "pre-owned cars" or even "pre-loved cars?" One of the reasons you don't see more refurbished products in the spotlight is because people like the idea of buying something new.

The perception that there might be a problem with the product lasting a long time prevents many from taking a chance on a refurbished item. That's why refurbished merchandise sells for less.

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But that's not the only problem with getting the items back on store shelves. Manufacturers have to figure out ways to get the products back to their warehouses and refurbish them in the first place. Those channels may be different from the main distribution channel. This process is called reverse logistics, as the products to be refurbished have to travel upstream to the manufacturer to be prepared for sale again.

Taking the items apart and reassembling them to work properly -- in a sellable condition -- means having experts available who can take the electronics apart, identify the problem, replace the offending parts and reassemble them. Expert help, of course, costs more than someone who will smash the items open with a sledgehammer. The cost of labor, transportation, replacement parts and repackaging and reshipping are all things a company has to consider when implementing its refurbishing program.

But when taking into account the costs of recycling defective materials, buying new ones and the cost of losing customers over a string of defective products, it can be in a company's best interest to bring used and broken electronics back to market in top-notch condition.

You don't have to be a computer expert to swap out a hard drive or add some more memory. And by doing so, you're refurbishing your own machine.
You don't have to be a computer expert to swap out a hard drive or add some more memory. And by doing so, you're refurbishing your own machine.
Eric Glenn/DK Stock/Getty Images

As the world starts to embrace recycling and learns about the environmental costs of dumping electronic waste and haphazard recycling techniques, more companies are feeling pressure from individuals and organizations to make their operations more environmentally friendly. Greenpeace is one industry watchdog, releasing its ranking on green electronics in 2006 [source: Greenpeace]. In its ranking, Nokia and Dell were the leaders, though their green credentials were still far away from the nonprofit's most positive rating.

But not all refurbishing has to be done by a manufacturer. Any time you upgrade a used piece of equipment yourself, you're refurbishing it. If your hard drive crashes (you back up your data regularly, right?) you may be able to install a new one, rather than buying a whole new machine. Or would you speed up your old machine if you added some new memory? Or a faster processor? You might be able to refurbish your old machine for less than the cost of buying a new one.

For more information on computers, electronics recycling and other related topics, visit the next page.

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Sources

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  • Ferrer, Geraldo and Whybark, D. Clay. "From Garbage to Goods: Successfully Manufacturing Systems and Skills." Business Horizons. Nov./Dec. 2000., Vol. 43, Issue 6, p. 55.
  • Gallagher, David F. "Plastic Gold: Recyclers Find Profit in Printer Ink Cartridges." The New York Times. July 18, 2002 (Feb. 22, 2008). http://query.nytimes.com/gst/fullpage.html?res=9D06E7D81239F93BA25754C0A9649C8B63
  • Lundquist, Pam and McCrandle, P.W. "Control-Alt-Recycle." Grist. Apr. 6, 2004 (Feb. 25, 2008). http://www.grist.org/advice/possessions/2004/04/06/Lundquist-McRandle-computing/index.html
  • Mooallem, Jon. "The Afterlife of Cellphones." The New York Times. Jan. 13, 2008 (Feb. 22, 2008). http://query.nytimes.com/gst/fullpage.html?res=980DE1DD1F3CF930A25752C0A96E9C8B63&sec=&spon=&pagewanted=print
  • "Frequently Asked Questions." Collective Good. Feb. 25, 2008. http://www.collectivegood.com/faq.asp
  • "Revenge of the Seth." Grist. July 11, 2005 (Feb. 25, 2008). http://www.grist.org/comments/interactivist/2005/07/11/heine/index.html