Will Walmart’s Gadget Trade-In Program Encourage Upgrades?

Discussion
Aug 19, 2013

Walmart has introduced an online program called "Gadgets to Gift Cards" that lets customers trade-in their old electronic devices — in working or sometimes non-working condition — for a gift card.

First introduced in an early August press release announcing its back-to-school deals, Walmart said Gadgets to Gift Cards is one of the only trade-in programs at retail.

"Customers can visit www.walmart.com/gadgetstogiftcards for an offer on their used gadgets — like $225 for an iPhone 4S 64GB, $175 for a Samsung Galaxy SIII 16GB, or $250 for an iPad 3 in working condition," Walmart stated in a release. "If they accept, customers will receive an instant e-card redeemable at any of Walmart’s 4,000 stores in the U.S. or online at Walmart.com."

Walmart accepts smartphones, video games and game consoles, MP3 players, tablets, e-readers, computers, cameras and GPS devices. Selecting the device to trade-in, as well as its condition, leads to an instant appraisal quote. The gift card can be used on any item.

The site refunds some items even if they’re not in working condition. A fourth generation Apple iPhone (16GB) with AT&T as the wireless carrier earns a refund of $205 if it’s working, and $75.00 if it’s not working. A fourth generation Apple iPod Touch with 64GB storage capacity earns a refund of $85.00 if it’s working, but has no value if it’s not working.

Users have to pass a credit check first before they utilize the program. After they agree to the refund, they’ll have 10 days to send their device to Walmart, with a free shipping label to boot.

GameStop and other video game stores have long accepted trades on older games for years, helping provide an incentive for those looking to upgrade to newer games. GameStop also resells those games to gamers looking to save money.

Walmart didn’t indicate whether it planned to resell the devices it receives through Gadgets to Gift Cards. But with eBay, Craigslist and other websites being the primary way to gain value from older yet still usable electronic devices, many tech bloggers felt the program was positioned similarly to Gameboy’s in helping encourage consumers to upgrade to newer devices. Many felt the program was timed to the expected release of the next iPhone on September 10.

Last week, Walmart said weakness in its entertainment sales, attributed to a lack of innovative product, at least partly led to its second-quarter shortfall.

What do believe are the most important objectives of Walmart’s gadget trade-in program? How else could retailers encourage consumers to upgrade from their older electronics devices?

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12 Comments on "Will Walmart’s Gadget Trade-In Program Encourage Upgrades?"


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Robert DiPietro
Guest
8 years 9 months ago

The name of the game is to drive upgrades and also solidify Walmart’s position as a destination for the best in CE products. It will also drive an additional trip to the store, which is always a good thing.

The other way to drive upgrades is to alert the consumer with an email or other mechanism, maybe a push notification.

It will be interesting to see what happens with the iPhone release in the fall. If it’s at a lower price point, Walmart may be the best exclusive launch partner.

Mark Heckman
Guest
8 years 9 months ago

First and foremost, this program puts Walmart on the pole position for buying any replacement technology that consumers may be in the market for. I like this approach a lot. Secondarily, it sends consumers to Walmart’s website, where other transactions can occur.

There appears to be a nice secondary market for used gadgets, and I would imagine Walmart has chosen such a repository for disposal of the old technology that consumers trade for the gift cards. As with all things marketing, this program may or may not stand the test of time as an ongoing service, but it has the potential to be pretty powerful in the short run.

Tom Redd
Guest
8 years 9 months ago

This program centers on web store traffic. The more you get the shopper to the site, the more chances you have of selling them something. Ignore all the process steps and think, “if the shopper is spending time at MY site, they have less time to spend on other sites.” Good move on Walmart’s side—basic selling in the fast changing retail world.

To all with kids in college, it is time to sort through the kids closets while they are in college and sell their stuff. It is our duty!

Tom…in a closet finding money!

Zel Bianco
Guest
8 years 9 months ago

Gadget trade-ins are a great idea, especially for credit in the store. This is a smart way for Walmart to gain foot traffic as well as some loyal customers that feel the pangs in their wallet every time they need a gadget upgrade. Best Buy’s buyback program has been successful for consumers wanting the latest items without breaking the bank every time.

The smart thing for Walmart is that they carry everything. People may use this for gadgets, or whatever they want. That’s a great model. Other retailers should definitely try to access this model by promoting what they take back and what they could gain from the exchange. I’d be interested to know what Walmart is doing with the electronic items, as the article suggests.

Shep Hyken
Guest
8 years 9 months ago

In its simplest form, Walmart is offering another good service to consumers. They will take a customer’s “junk” and give them some credit (even a small amount of credit) for it. Walmart can recycle or resell the item. Bottom line is that Walmart gets the customer back in the store. The customer gets a something in return. It’s a win/win.

There are obviously many great details that go into a program like this, but overall, it’s a worthy idea worth trying. I look forward to seeing the results of the program.

Gene Detroyer
Guest
8 years 9 months ago

Two computers…3 mobile phones…Walmart, here I come!

This program certainly increases the electronics profile of Walmart. But better than that—gift cards are good for business.

Consider:
1. Gift cards can be used for anything the store carries.
2. When a customer uses the gift card, they generally buy more.
3. If the customer doesn’t use the gift cards (or has a residual), it goes right to the bottom line.
4. Assuming there is value for Walmart to the traded in merchandise, Walmart gets to use that value until the gift card is redeemed.

Good thinking, Walmart!

Ed Rosenbaum
Guest
8 years 9 months ago

This is a door opening driver for Walmart. Give them credit; they have the lead position now, and that will make it hard for others to catch up. This will drive electronic sales up for them. I doubt it has been as strong a sales point up to now, even though there is strong shelf positioning in the stores.

James Tenser
Guest
8 years 9 months ago

Walmart is all about capturing the transaction. There are numerous used device trade-in programs out there already, including retailer programs operated by CExchange, LLC, the partner identified as “powering” the Walmart program.

The primary competitive opportunity for Walmart is to scrape that found money before it’s spent elsewhere. If the buy-back cash is paid as a branded gift card, that battle is half won.

Anne Bieler
Guest
Anne Bieler
8 years 9 months ago

The gadget trade-in program will bring a different group of buyers to its website, and then bring them back for another purchase. Great idea!

Good approach and timing, as the new school year brings attention to need/want for newer devices. Walmart is not always the first stop for CE—specialized retailers have greater assortment, advertising, and promotions to attract shoppers for these higher ticket/impulse entertainment purchases.

Another approach would be to arrange a credit for a shopper who donates to a “recognized” e-recycler. Win/win when electronics get an extended user life, e-devices are kept out of landfills, and shoppers are given an incentive to purchase.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
8 years 9 months ago

I initially got the impression that the objective of the new program is to increase sales of electronic products. B-b-but, it seems that the gift cards can be used throughout the store — not just in the electronics department. I question the wisdom of that part of the program.

Recently there have been huge increases in snatch-and-run smartphone thefts, to the point where the FCC will require manufacturers to develop ways to prevent reactivation of stolen units. Until then, does the Walmart program provide yet another outlet for stolen smartphones? There is a robust illegal market for gift cards of all types, including those from Walmart, which is a way eventually to convert stolen smartphones into cash.

Also, why credit checks? What is the required credit number threshold? But, why have credit checks at all?

Bill Hanifin
Guest
8 years 9 months ago

A program like this helps solidify Walmart stores as a hub of daily commerce, especially with groups of consumers who otherwise would be patronizing an entirely different set of competitors.

I have seen that Best Buy has announced a similar program, a good idea for them as well.

Could it be we will see a wave of these programs in the very near future? If so, whatever competitive advantage owned by Walmart now may be quickly diluted.

Gordon Arnold
Guest
8 years 9 months ago

Those guys and gals at Walmart refuse to stop trying just about anything that has a chance of making a dent in the market share aspect of retail business. Listen people, there is no growth through business development. In order to stabilize, grow and secure a place for tomorrow in the present economic conditions world wide you must adapt to a depression economy. That means jumping into markets that have weaknesses like over pricing and under competition. Walmart gets it, you need to also. But that’s just what Walmart and I think!

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