January 17, 2008
Innovative Companies Reinvent Recycling
Today, everyone thinks about getting new toys, but not many people think about getting rid of the old ones. What's left are storage areas chocked full of old cell phones, defunct laser printers and Pentium III computers gathering dust.
There are several companies who want to help clear out those old gadgets, while at the same time feeding our upgrade habits, helping the environment and getting themselves some green.
According to AP, instead of being hit up for an extended warranty next time you buy a gadget, you may find yourself hearing a pitch from TechForward Inc., a Los Angeles-based company selling a "guaranteed" buyback plan for electronics.
For example, when you buy a device, you pay a small fee- $9 for an iPod, for instance "“ for the right to sell it to TechForward at a predetermined price that depends on how long you keep it. If you sell an iPod after a year, for example, you would get $40; after another year, $20.
AP explains that in the financial world, this is known as a "put option" - the opportunity to sell a certain number of shares at a certain price at a certain date in exchange for an upfront fee.
Jade Van Doren, TechForward's chief executive, told AP that his inspiration came from traveling in Asia, where gadget worship is even more pronounced and some consumers buy new cell phones every few months.
"I just started thinking about ways that you could build a company around ... encouraging people to live that lifestyle of temporary ownership," he said.
The trade-in prices don't look competitive with eBay auctions, but TechForward offers the convenience of free packaging and shipping. Its prices assume the item is in good condition. The company won't pay for an item that's broken, though it will supply packaging, pay for shipping and arrange to recycle it.
Not only does TechForward accepts from customers its retail partners sign up when they buy electronics, the company lets owners of a limited range of gadgets sign up online to participate.
Currently, TechForward's partners are small West Coast retailers. They get a share of the initial fee and can count on repeat business from customers who trade in their old gadgets.
"The fact that we're helping people upgrade more quickly is beneficial to the owner of the device but also beneficial to the retailer who's trying to sell the new product," Marc Lebovitz, TechForward's vice president of operations told AP. Techforward claims participating stores are selling its guarantee with 12 percent of applicable gadgets.
NEW Corp., a much larger company that runs the extended warranty programs for Best Buy Inc. and Wal-Mart Stores Inc. (WMT) (WMT), plans to bring a slightly idea to stores in the second quarter, AP continues. The ecoNEW program - which amounts to a vast expansion of the trade-in programs some retailers run, mainly as promotions - won't charge upfront like TechForward.
Instead, the program will provide store credit for old electronics in some categories, like computers, MP3 players and smart phones - with the dollar amount depending on the market for the particular equipment when it's traded in. Older items, like printers and non-LCD monitors, won't qualify for credit, but users will be able to send them back to NEW for free for recycling. Some other items, like cell phones, aren't eligible for credit or recycling.
Dan Hulkower, vice president of client management at NEW, told AP that the Sterling, Va.-based warranty company hopes to bring in as many types of products as possible.
"We've got the green contingent in the company screaming for this solution and to make it as altruistic as possible," Hulkower added.
The program will be offered by retailers - NEW can't yet say which - so customers will go to their Web sites or stores to return things. With no receipt necessary, they will be able to return things bought from other stores.
Some of the other manufacturers, like Apple Inc. (AAPL), Dell Inc. (DELL) (DELL) and Hewlett-Packard Co., have their own recycling programs, Of course these programs generally rely on customers mailing in their old gear. In September, Sony Corp. (SNE) began accepting discarded electronics at some Waste Management Inc. (WMI) drop-off centers.
The NEW and TechForward programs offer consumers a new avenue. While it is reasonably easy to resell working, high-value electronics through eBay it has been harder for consumers to dispose of defunct or obsolete items in an environmentally safe manner.
According to the Environmental Protection Agency, only a mere12.5 percent of U.S. electronics waste is offered for recycling each year, and much of that is actually dumped rather than recycled, the EPA added.
Recycler TechTurn Inc. told AP that it estimates there are 600 million to 800 million personal computers sitting unused in the U.S. They contain substantial amounts of lead, among other toxic metals.
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