Best Buy Future Proofing Or Future Farce?

Best Buy BBY is giving consumers the chance to future-proof their products – for a price. Is this the deal of the century or a lame attempt at cashing in on the fears of gullible consumers? Many of us have purchased a phone or laptop prematurely, thinking that we were getting the latest and greatest piece of technology. In reality, we were saddled with nothing more than an interim product that quickly became too slow, too sluggish, and/or too dated to enjoy. Add to that the frequent hardware updates from Apple AAPL and other tech manufacturers, and you can begin to see the problem that consumers have been facing. Ideally, Best Buy would be the knight in shining armor in this situation. Thanks to the new buy back program, replacing an old HDTV should be a piece of cake. That is, assuming consumers don't mind spending upwards of $70 for a slice. To be clear, “future-proofing” is not free – not in the long-term, at least. For now, Best Buy is giving the service away. However, a quick search* on BestBuy.com reveals that a 55-inch HD from Samsung (which retails for $1,199.99) will cost consumers an additional $99.99 to future-proof the set for four years. *As of 2-7-11. Today (2-8-11), BestBuy.com changed the buy back program price to “$0” to coincide with the limited-time free offer. What do you get for that extra money? Not an extended warranty/protection plan (which is sold separately), but the ability to sell the TV back to Best Buy for up to 50% of its worth. The buy back value works like this: Sell the item (a mobile phone, laptop, netbook, tablet or TV) back within six months of the purchase date and you will get 50% of the value back. Sell the item in six to 12 months and you get 40% back. Sell the item in 12 to 18 months and you get 30% back. Sell the item in 18 to 24 months and you get 20% back. This is the end of your buy back period – 24 months. TVs can be secured for up to 48 months, but at a rate of just 10% after the 24th month. For cell phones and tablets, this might very well be the best deal in town, because users can essentially test out the newest, most overpriced mobile gadget with a degree of buy back security. Had the buy back program been introduced sooner, it would have also been a great deal for consumers who purchased the first crop of netbooks (which were generally too weak to use for more than a few months). With laptops and TVs, however, this seems like a cash cow for Best Buy and a serious mistake for the average consumer. Most people don't buy a new laptop every six months. Most people don't scrap their 50-inch televisions every year. More often than not, consumers hang on to their computers until they break or become severely outdated (typically three to five years after purchase). But the company doesn't want a broken PC – your electronics must be in good working condition or Best Buy won't take them. Thus, if Best Buy can get consumers to drop $100+ on a buy back program they may not use right away (if at all), the company will earn a very nice profit. Further, Best Buy does not guarantee their buy back value beyond the tiered structure. On its FAQ page, question #11 addresses this issue: 11. Won't Buy Back offer less money than what I could get if I just tried to sell my product on eBay or Craigslist? Answer: “We can't guarantee that we'll always beat what you could get if you resold the product on your own. But at Best Buy, we will always give you the higher of the Buy Back price or our own trade-in program's value when your product is returned in good condition with all of its originally included parts. With the Buy Back Program, we'll buy the product back, at a price that provides you huge value to move to the next product of your choice.” Shoppers would be wise to consider these issues before opening their wallets. While the service may be enticing (and a decent way to test out a product consumers are unsure of), the type of product – and its presumed lifespan – should not be ignored. Otherwise, consumers will be handing Best Buy an extra paycheck without getting much of anything in return.