Refurbished cell phones get a little smarter

Always check the warranty
Refurbished phones are also available via the Web through independent retailers. Carriers sometimes also sell them to customers who opt for pre-paid, or pay-as-you-go, phone services.

The major wireless carriers vary when it comes to selling refurbished phones to customers for contract plans. Sprint and Verizon Wireless do not, as of now. T-Mobile sells some refurbished phones (no G1s, or Android phones, yet), and AT&T has the broadest selection available.

The disincentive for carriers is the price; refurbished phones can sell for up to 60 percent less than retail price.

Checking what kind of warranty is offered on a refurbished phone is important. Ninety days is considered good and should be enough time for you to learn if there are any problems with the phone; anything less may not be so reassuring.

T-Mobile says its refurbished phones are under warranty “from either 90 days of receipt or the remainder of your 12-month service agreement, whichever is longer.”

'Double-edged sword'
“Buying a refurbished smartphone is a double-edged sword,” said Adam M. Fendelman, who reports on cell phones for About.com’s cell phones guide.

“On one hand, they tend to be more expensive than cell phones and the definition of refurbished is that you're buying for less. On the other, you get what you pay for and you're opening a can of worms for potentially more problems than buying new.”

Fendelman recommends buyers compare the cost savings they might get by going with a refurbished smartphone to the cost of a new one “to gauge whether that's worth potential hassles down the road. If your refurbished price is 10 percent off, that may not be worth it for you. If you're being offered 30 percent off, though, that may be the golden number.”

He also advises buyers to ask wireless carriers and vendors if they will guarantee that the refurbished smartphone they’re buying “isn’t dead on arrival.” Buyers should also ask why the phone was returned in the first place and if it was restored to factory specifications.

Still a small percentage of market
New phones that are returned to wireless carriers and wind up being sold as refurbished are supposed to be “reflashed,” meaning all the data previously on the device is wiped clean, and the phone’s software is restored to factory settings.

For now, refurbished phones remain a relatively small percentage of the worldwide cell phone market, said Burden of ABI Research.

In 2008, with about 1.2 billion handsets shipped worldwide, 40.7 million of those were refurbished phones. It’s a number he expects will increase this year to perhaps 46 million.

ReCellular Inc., which sells both refurbished and recycled phones to businesses worldwide, says that the “average American replaces their cell phone every 18 months.”

Three years ago, ultra-compact phones, like Motorola’s early generation of RAZRs, and “entry-level” camera phones were among the popular consumer choices. “Today, those phones are being retired in large quantities as consumers are moving toward newer technologies, especially smartphones and multimedia-enabled handsets,” said Chuck Newman, company CEO, in a statement.

Based on that trend, the company said it “expects the best-selling models of today — such as the Apple iPhone and BlackBerry Curve — to appear on the list of top recycled models in 2009 or 2010.”

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