Resale value: We demystify the world of not-new phones

By: SNEHA MAHALE
| Updated on: Nov 26 2015, 18:53 IST

image caption — ‘Unboxed’, ‘refurbished’, ‘pre-owned certified’: We tell you why buying not-new phones is not such a bad idea

Not too long ago, shoppers had only two options to consider while purchasing a new gadget. You could either opt for a new device, or go in for an older model. But lately, one comes across terms like 'refurbished', 'unboxed', 'pre-owned certified' or 'unused' quite often while browsing for products on websites. It leaves buyers with questions like, 'What do they mean?', 'Why are the prices of these gadgets lower?', 'Do such devices even qualify for manufacturer's warranty?' or 'Do people actually buy such products?"

"In India, almost 20 to 25 million electronic devices come back to sellers every year. Some are used, others may be defective. This creates a large reserve of products that can be refurbished and sold," says Hitendra Chaturvedi, founder and CEO, GreenDust.

In a price-sensitive market like India, such devices work to the advantage of customers who want to upgrade, but have a limited budget. "Sign-ups for our flash sales have increased by eight times over the last three months. If anything, this market is constrained by supply and not by the demand for such products," adds Saptarshi Nath, managing director and co-founder, Overcart.

In fact, the demand for such products is so high that it has resulted in the entry of bigger players like Amazon and eBay, into the market. "Our consumer insights give us enough reason to believe that there is a market in India for quality-assured, brand-refurbished smartphones at value prices. We are starting the refurbished category as a pilot, and will scale as we see more feedback from customers," says Noor Patel, director category management, Amazon India.

Here's our guide to what a buyer should know while opting for second-hand products.

What do they mean?

Unboxed: These are new devices, but with the seal opened. They typically come via sellers who may have received them as returns from their customers after the packaging of the product was opened.

Refurbished: They are usually gadgets with identified minor faults, but which have been restored to their original working condition by the manufacturer or a third-party refurbishment partner. Products under this category may have minor signs of wear and tear, but tend to be in perfect working condition.

Preowned: These are used devices, and may or may not come with original manufacturer packaging. These are also quality checked.

Unused: Typically made up of surplus stock that was never sold. The packaging is likely to be intact. These, therefore, do not require a quality check.

iPads sell fast among refurbished tablets ( )

So then, why do they cost less?

Since these products are not termed as new, their value decreases. This means that you can snag a refurbished 16GB iPhone 6 for ₹36,500 or bag a 32GB Sony Xperia Z3+ for ₹31,999. Most of them are sourced from manufacturers, e-commerce sellers, large-format retailers and distributors. Since such devices have been unpacked and returned, they cannot be resold as new. Their stock piles up at the seller's warehouse. By selling such devices, customers gain access to products at lower prices while giving businesses better value for their stock.

Do they go through quality checks?

Most websites that specialise in the sale of such devices have a stringent quality-check process in place. Gadgets are inspected to assess defects, fixed using genuine parts, and tested again to ensure that they are up to the mark. In case a customer is still not satisfied, a few even take the product back, and offer a full refund. "We have 75-point checklist to make sure the consumer gets the best product at an affordable price. These checkpoints define the quality and safety criteria for sale and purchase of used and refurbished electronic goods," says Saumitra Gupta, director, TogoFogo.

And do they qualify for warranty and other services?

For most unboxed and refurbished devices, the original manufacturer warranty is extended to the new buyer for the remaining warranty period. That apart, some websites selling such devices also offer their own warranty, which typically lasts for a year (a year is what you get even for new devices). A few have their own service centres that the buyer can approach in case there is a problem after purchase.

Which devices are popular?

Smartphones seem to be popular at present. "Customer interest is the highest in the below ₹10,000 category, especially in phones such as Lenovo K3 Note, Xiaomi Redmi 1 and 2, and the Asus ZenFone series. Also, the OnePlus One continues to be our fastest-moving product across categories," says Nath. iPads sell fast among tablets, followed closely by those tablets priced around ₹5,000. But the rest of sales are seasonal, and extend to beyond smartphones and tablets. So while ACs and refrigerators are hot items in the summer, during the holiday and sports season, TVs are popular.