Business Today

Behind Buybacks

Getting an assured sum for an old device sounds tempting, but one has to be aware of the pitfalls.
twitter-logo Nidhi Singal   New Delhi     Print Edition: February 24, 2019
Behind Buybacks
Illustration By Raj Verma

If you prefer selling your old phone while buying a new one but do not want to get into a lengthy haggle over the best price for your old device, you should take advantage of an assured buyback programme offered by many sellers. Assured buyback by e-commerce players promises customers a buyback price right at the time of the purchase. In most cases, buyers are asked to subscribe to this option by paying a little extra at the time of the purchase. When you plan to avail it, inform the e-commerce company. It will collect the device from home, do quality checks right there and soon you will get the buyback money in your e-wallet which can be used while buying a new phone from the same seller. However, you have to forfeit the subscription fee and sell your old gadget elsewhere if you do not want to buy the new phone from the same portal.

Paytm Mall, in partnership with Mumbai-based Servify, an after-sales service provider authorised by major brands, has come up with an 'assured buyback scheme' for laptops purchased from the e-commerce portal. A buyer has to pay an additional Rs 499 for the scheme, and in return, the online mall will offer a buyback price. The scheme will kick in six months after a purchase is made and will continue up to three years from the purchase date. The portal features all popular models from Apple, Acer, Lenovo, Dell and Asus, and the buyback price varies as per the brand in question. For Apple laptops, the company offers up to 60 per cent of the purchase price for the first year, 35 per cent for the second year and 20 per cent for the third year. The assured price for Dell, HP, Asus, Acer and Lenovo is 50 per cent for the first year; the rest remains the same.

Similarly, Flipkart offers a 'buyback guarantee' for mobile phones for exchanging the current phone with Flipkart on purchase of a new phone. By paying Rs 99 extra, one would get a discount of Rs 6,500 on Xiaomi's Redmi Note 6 Pro (current price is Rs 13,999) between six months and one year from the date mentioned in the invoice. An increasing number of smartphone manufacturers are also offering buybacks on select models when their products are sold on these e-commerce platforms. For instance, there is the OnePlus Assured Upgrade, which, for Rs 199, promises to offer a guaranteed buyback value of 40-70 per cent within three to 12 months when one is upgrading to the company's next flagship device.

"Buyback as a process has always been unstructured, and prices are never guaranteed due to manual procedures and fraudulent practices. It used to be mostly offline where a physical verification was mandatory to know the health of the device. Now people are trying a tech-enabled process for the first time where we know every single IMEI/serial number. The device is put through a thorough diagnosis to revalidate its health before paying the assured buyback price, thus reducing frauds. The resultant benefit is passed on to consumers," says Sreevathsa Prabhakar, Founder of Servify.

However, not everything is as easy as it sounds, especially as one has to keep in mind the stringent time frame. In most cases, a customer qualifies for a buyback at least six months after the purchase. He/she is also asked to produce the original invoice that matches the product ID/IMEI mentioned on the device. It must be in a good working condition, charging should be in apple-pie order, and there should not be any crack, scratch or dent on the body. Moreover, the device has to be returned along with the original box, charger and accessories that came with it at the time of purchase. Even a single missing item can spoil the deal for you.

Resale versus buyback

The buyback trend seems to be catching on across e-commerce platforms, but unorganised offline retailers do not seem too interested in this model. According to Manish Khatri, Partner at Mumbai-based Mahesh Telecom, "Assured buyback is not a success in offline retail as customers are looking for upfront discounts and offers instead of spending extra and waiting to avail discounts on their next purchase. They get better resale value than what they get under assured buyback. Also, the offers from these companies have lots of terms and conditions, and even a small dent on the phone can reduce the value to a great extent."

However, Bengaluru-headquartered Sangeetha Mobiles, South India's leading multibrand retail chain, offers assured buyback options which seem more flexible than what people find on e-commerce portals. If you wish to exchange your old mobile phone, walk into one of the stores with the phone and other things mentioned above along with identification and address proofs. But in case one is unable to provide original accessories, box and packing, only 10 per cent is deducted from the buyback price. The company claims to offer 80 per cent of a phone's value within 30 days of purchase and up to 50 per cent within a year depending on the condition of the handset.

Many argue that one could obtain a better price by selling the device in the offline market. However, not everyone knows the golden rules of reselling or finds it convenient. For them, an assured buyback makes sense.

@nidhisingal

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