Costco Pairs With Gazelle for Old Tech Trade-Ins

I hadn’t heard this yet. What a great idea. Not in small part because it’s difficult to get rid of old computer monitors and CPUs. Thanks, Costco.

By Geoffrey A. Fowler

Last week, Costco quietly rolled out a new partnership with Web site Gazelle to encourage its legions of discount shoppers to trade in their old technology for credit they can spend on new gadgets.
blackberry_D_20090717173100.jpgGazelle


The Costco customer program works pretty much like the one that startup Gazelle has offered to everyone for about a year. Enter the make and model of your old gadget (say, a third-generation 8GB iPod Nano) into the Costco Gazelle Web site, and the company tells you how much cash they’ll give you for it ($47, as of Friday, July 17) if you put it in a box and mail it to them. Gazelle then resells your old gear on eBay and to wholesalers — or, if it’s really old, they’ll recycle it for the value of its tech innards.
Gazelle says it will pay Costco customers about 2.5% more for their old electronics than it does through its normal service. But instead of sending you a check, they pay you with Costco Cash, which works like a gift certificate.

“We’re turning a cellphone into next week’s groceries,” said Israel Ganot, CEO of Gazelle. He calls that system “recommerce.”

The program accepts 20 categories of products including digital cameras, laptops, MP3 players and cellphones. (They won’t take TVs and printers, which are heavy and cost too much to mail.) On average, customers get $100 for their old gear. Costco doesn’t get a cut of the revenue on the trade-ins, said Ganot.

For now, the system only works online, and Costco is marketing it to its customers through its Web site and emails. In the future, Gazelle says it wants to explore allowing Costco shoppers to bring their old gadgets directly into the store to trade in for cash.

Mandatory electronics recycling programs, now law in many U.S. states, are controversial with gadget makers and retailers. Costco has offered a different electronics recycling program in the past, but some shoppers reported that they found them to be too much hassle.

Costco senior vice president Ginnie Roeglin said that the company’s original recycling program was run by Greensight, which went out of business. “We were impressed with the credentials and experience of the management team of Gazelle. They have strong retail and online experience,” she said.

“No retailers want to be in the recycling business,” said Ganot. “They are happy to outsource it to somebody who can do it at charge for their customers — and here we are introducing a big innovation is rewarding consumers for recycling.”

So far, about 1,000 Costco customers have tried out the program, said Ganot, mostly to trade in old laptops.