Buy-Back Basics

When you're buying a new gadget, don't be so fast to throw out your old computer or send your cellphone to the recycling bin. There's a thriving resale market for plenty of used electronics. Kelli Grant, Senior Consumer Reporter for SmartMoney.com tells what you need to know.

Do not pre-pay. Best Buy and Square Trade just launched programs that, for an upfront fee, guarantee a resale value for your gadgets down the line. These aren't a great deal. Usually, you're getting less money back than other free programs offer, with the fee eating further into the total.

Right now, there is such international demand for smartphones that sellers are in a unique position - you can actually get more back for a phone than you paid for it. Someone who spent $200 on an iPhone 4 last year could get up to $360 back for it right now on trade-in sites. Owners of new Android and BlackBerry handsets are in a similar position.

Resale value is primarily dependent on the condition of your item. Even buy-back programs that guarantee value have fine print that reduces the estimate if an item isn't in good condition. A case or screen protector is likely to pay for itself in additional resale value for fragile items like a smartphone or laptop computer.

Shop around. Plenty of stores have programs, including Target, Sears, Costco, WalMart and Best Buy. Some are in store, and others are online. There are also independent start-ups like NextWorth and Gazelle - and there's always eBay, too. Shop around to see which place will offer the most for your item.

Most store buy-back or trade-in programs give you store credit, not cash. Stores are expecting, of course, that you'll spend more than the gift card balance. You can get cash by trading with Gazelle.com or NextWorth.com directly. Otherwise, get a sense of what you want to buy before deciding where to trade in.

For more information on buy-back programs and other consumer tips click here.