May 25, 2018 8:00 AM

What to Think About Before Buying a Used Smartphone

New isn’t always better, but there are three key things to consider before you take the pre-owned plunge.

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The companies that make smartphones would like you to believe that you that a brand new phone is the best kind of phone; that your life will somehow be lacking if you don’t have the updated camera/processor/emoji/virtual assistant button, all packaged in polished glass (the better kind of glass). But there are plenty of good, slightly older, used smartphones out there, and the used phone market has been growing right along with the overall smartphone market.

Plus, there are now legitimate ways to buy used or refurbished phones. Not long ago it felt like your best option was taking a chance on an unknown seller who used aLtRnAtInG cApS and excessive asterisks on Craigslist; or that there was a high likelihood the “refurbished” phone you were buying was an old phone with a bum battery. All of those things can still happen, but now, e-commerce and trade-in sites are starting to offer more assurances for buyers; whether that means sharing more details about the condition of a used phone or offering slightly better warranties. And since everyone from lesser-known startups to the giant phone manufacturers are getting in on the second-hand game, you can choose to shop on sites that match your comfort level.

So if you are considering buying used, here are three key things to think about before you take the pre-owned plunge.

Consider the Source

Let’s get this one out of the way: There’s always the potential for fraud when you aren’t walking into a name-brand retailer and buying a new phone that’s going to be activated for you on the spot.

I had a good experience with the “perfect condition” iPhone I recently bought on eBay. But it goes without saying that when you use peer-to-peer marketplaces, you don’t have the same fine-print assurances you’d get from a certified seller. eBay says it spends millions each year ensuring a "trustworthy experience," but its forums still show scattered complaints about phone scams. Even in my experience, I wasn’t totally sure that the “top-rated seller” who had “100 percent positive feedback” hadn’t somehow gamed the system. (Fake reviews are also a very real thing on e-commerce sites.)

If that seems too risky, Apple and Samsung both sell refurbished phones. Usually these aren’t the absolute latest phone models, and inventory can be limited, but they do come with year-long warranties. Wireless carriers also sell “certified pre-owned” phones, though again, the selection can be slim. (At the time of writing there were only three pre-owned devices listed on AT&T’s website.) It’s also worth comparing prices before you buy: A used Samsung Galaxy S7 is currently listed for $100 less on AT&T’s site than it is in Samsung’s own refurbished section, while a refurbished 128-gigabyte iPhone 7 is $25 less on Apple’s own site than it is in Verizon’s certified pre-owned store.

For the best combination of savings and security, check out sites like Swappa and Gazelle. These are marketplaces where you can buy and sell a wide variety of used electronics, though their business models differ. Swappa is more like eBay in that it facilitates the exchange between buyer and seller; Gazelle buys up the used inventory, refurbishes some of it, and then sells the products itself. There’s still a small chance that you’ll end up with a bad phone, but Swappa has extensive criteria for sellers who want to list their devices; while Gazelle says that less than 1 percent of the phones that end up in its system are stolen.

Generally speaking, there’s a trust-to-discount ratio that exists on these marketplaces. On eBay, you can find items that are marked down anywhere from 20 percent to 90 percent, but you’re trusting an unknown seller; whereas a refurbished phone on Apple or Samsung’s sites can still cost anywhere from $350 to $750. “A 256 gigabyte iPhone X is about $1,150 on Verizon, and right now it’s listed on our site for $989 in excellent condition,” says Yanyan Ji, SVP of marketing and general manager of e-commerce at Gazelle. “For most people that looks brand new, even though our technicians might see small scratches on the back.”

Feeling Used

Minor scratches or scuffs are to be expected with pre-owned phones, but structural damage and reduced functionality should be deal breakers. Phone displays are the parts most often in need of repair or replacement before they can be resold, followed by batteries, says Vianney Vaute, co-founder and chief marketing officer of refurbished goods marketplace Back Market. “After that there’s a huge drop in needed repairs, but it’s usually stuff like home buttons or WiFi connectivity issues,” Vaute says.

So how do you ensure that your pre-loved phone hasn’t just been used but totally abused? The short answer is that it’s hard to know, especially since different sites describe their used goods differently. In most cases, “used” or “pre-owned” items are a crapshoot, “verified” or “certified” phones have at least been checked for functionality, and “refurbished” items have gone through some level of repair.

Some sites, like Apple, say outright that the phone has received a new shell and battery, while Samsung says its phones have been “remanufactured to original condition” and tested by Samsung engineers. Gazelle says it has a “30-point certification” process but not all products are refurbished. Peer-to-peer marketplaces are the most vague, in terms of what “refurbished” means. In one listing I saw, the seller described refurbished as “tested and restored to factory settings by our in-house technicians,” which sounded to me more like the phone was verified.

“I honestly don’t know a good way to compare refurbishers or to know who is going to guarantee a new battery or not,” says Kyle Wiens, CEO of iFixit. “Some places, if there was a single scratch on the back panel or front glass they would just replace that entirely, whereas other sellers won’t.” Wiens says it might make sense for people to just get the best phone they can get and then plan to replace the phone’s battery themselves within a certain timeframe.

One thing to consider is if you’re buying a used phone for environmental reasons: buying a completely refurbished phone or going with Wiens’s approach means you’re reusing some of the phone’s parts, but not all of them.

Fine Print

Almost more important than the condition of the used phone, says Vaute, is what kind of return policy they have and the kind of long-term protection they’re offering you. “The truth is that these are signals you send to a consumer, and it’s the only way to signal that this device is as good as new,” Vaute says.

Return policies are usually short, ranging anywhere from two weeks to 30 days, so you’ll want to read the fine print before you buy. Some companies, like Gazelle, establish these policies themselves, while others rely on the integrity of the sellers and buyers. Swappa “does not define return policies,” though it does say that no seller can deny a return or refund when a device is not as advertised. (Swappa also uses PayPal for payments, so buyers are covered by PayPal’s 180-day protection policy.) eBay provides a Money Back Guarantee that usually requires action within a 30-day window. Again, it puts a lot of the onus on the seller and buyer to work things out on their own.

Warranties also vary, but it’s almost always worthwhile to look for one that’s bundled in with the sale of the phone and offered by the original manufacturer or refurbisher. It streamlines the process if you do need to send in your phone for repair, because you’re dealing with the same place that sold you the phone. You’re also less likely to be sold a protection plan that’s not the right fit, or even invalid, for the device you’re buying. (SquareTrade, which has been the protection provider of choice for major retailers like Amazon and Costco, was once hit with a class action lawsuit over allegedly fraudulent protection plans.)

Apple's refurbished phones come with a one-year warranty, as do Samsung’s certified pre-owned phones. Back Market, which has been operating in Europe since 2014 and just came to the US, says it guarantees a six-month warranty: The original refurbisher will either repair, replace, or refund a phone if something goes wrong in that time frame. Ji, from Gazelle, says the company plans to add extended-warranty options for some products on its site in the second half of this year, which will include up to one year of coverage for an extra fee.

All of this might seem like a hassle, but more and more people are getting on board with used electronics. Research firm IDC predicts the used smartphone market will be worth around $30 billion by 2020, growing from 81.3 million devices in 2015 to 222.6 million five years later. That’s still a small sliver of the overall phone market, but it shows that there’s growing interest for used. It also shows that people are increasingly willing to get something that’s “new” to them, rather than that shiny new thing a company feels compelled to release every year.

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