Ownership 2.0: Insuring Your Electronics

Electronics have changed the way we live over the past century, but throughout all the technological innovations two things have remained constant:

1. Changing technology gives many electronics a short shelf-life
2. Electronics depreciate in value faster than anything but cars

The average person owns 24 electronic products, and in the case of cell phones for example, the average lifespan is 18 months. Not only is resale value typically low for consumer electronics, but in some cases, you’ll be charged to recycle an obsolete device (after all, the recycling process isn’t free for everyone).

So what’s the solution for upgrading with an upside? One option growing in popularity is called “Ownership 2.0,” where you consider ownership and disposal at the point-of-purchase, instead of when that Trojan virus renders your CPU useless.

Time to upgrade your old computer? You may want to start thinking about what your machine will be worth when you are ready to move on to the next best thing. - NEA.com

The Basics

Ownership 2.0 is hardly a new idea. Whether it’s leasing cars, owning timeshares or renting videos, we’ve been considering disposal options at purchase for many products without even realizing it. But for electronics, the closest solution was to purchase a warranty and hope the device would breakdown (while still under the policy) so the maintenance was on someone else’s nickel.

Ownership 2.0 for electronics is a simple process:

1. You pay a one-time fee when the product is purchased to “lock-in” a trade-in value.
2. The trade-in value offers a guaranteed percentage of the purchase price that goes down based on length of time you own the product.
3. When you’re ready to upgrade, you ship the product off to be resold or recycled and receive the buyback offer in the mail.

One company that specializes in this model is TechForward.com, which has partnered with retailers including CompUSA and TigerDirect.com to offer a Guaranteed Buyback® when you purchase anything from flat-screen televisions and laptops to GPS devices and MP3 players. Even if you purchase the device elsewhere, you can still participate in the program within 30 days with a receipt.

You decide on a buyback date, then call for a free shipping box when you’re ready to trade-in. Items in “excellent condition” will net you extra cash, which comes in the form of a check or gift-card once the item is received and tested.

The Impact

It’s estimated that 75 percent of all the computers ever sold are stored up in houses and not being used. When the digital switch occurs sometime this year, 13.5 million televisions will be rendered useless to watch TV without a digital converter box.

While electronics in your garage are safer than electronics in a landfill, one of the primary benefits of recycling electronics is to remanufacture them into new gear. Pretty much everything that makes up your electronics (petroleum-based plastics, steel, even lead and mercury) are in limited supply, and recycling allows a second life for these materials.

Weighing the Options

Consider the cost-effectiveness of Ownership 2.0 versus investing in a warranty. They will be similar in price, and a warranty will cover your device for a longer period of time. But a warranty doesn’t offer you any wiggle room to upgrade, meaning you’ll have no financial incentive to get the newest technology, or be guaranteed what you’ll get back once you upgrade.

However, you can find warranties from pretty much any retailer and Ownership 2.0 is still largely an internet phenomenon for electronics. Plus, if you prefer to wear your electronics into the ground, a timeline for trading them in will not be your best friend. Ownership 2.0 is ideal for the person or family looking to stay in-line with technical trends.

Regardless of the road you choose, you can use Earth911 to find recycling and trade-in options for any of your electronics. The tough part is deciding what to do with all the extra room in your garage.