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The Other Smartphone Wars

There are lots of things to think about when you shop for a new phone: Which operating system should you go for? Which manufacturer has the best handset? Which provider offers the best network? and Which plan best suits the needs of you and your family? But there’s another consideration that’s becoming increasingly important in the search for a new device: Which retailer is going to offer you the best trade-in price?

While Apple was busy launching the iPhone 5S and offering a cheaper alternative with the iPhone 5C, Walmart yesterday had some news of its own. Starting September 21, visitors to Walmart’s 3,600 stores and Sam’s Club locations can get an instant credit for the trade-in value on over 100 different smartphones. The credits, which could range from $50 to $300 depending on the make and condition of the phone, would be immediately applied to the purchase of a new device.

Walmart’s move comes hot on the heels of a series of upgrade programs announced by the large cellular providers, who are equally enthusiastic about carving out a slice of this burgeoning secondary market. T-Mobile has its Jump! program; AT&T has Next; and Verizon recently introduced Edge.

Of course, all these trade-in programs are designed to encourage more frequent smartphone upgrades, an important consideration as the U.S. smartphone market matures. A new Pew Research Center report suggests that 56 percent of all Americans adults are now smartphone owners, with penetration of the 18-34 demographic reaching as high as 80 percent. With fewer first-time owners to chase, the focus is shifting to existing customers.

One of the problems with earlier trade-in programs has been the trade-in partner’s reluctance to accept phones that are in less than pristine condition. Walmart promises to change all that. Store assistants will be instructed to ask just 4 or 5 basic questions, according to Steve Bratspies, executive vice president of general merchandise for Walmart US. Does the phone turn on? Is the screen cracked? Have the security codes been removed? They are less interested in the usual nicks and scratches that are  seen as inevitable with most well-used smartphones.

Of course, the value of the second-hand phone will depend more on the make and model than how it’s been treated. iPhones and the later Samsung Galaxy handsets will continue to command premium prices, as they can be refurbished and re-sold. Phones with less marquee branding will be recycled, but even there consumers will benefit. Walmart’s partnership with CExchange means that no traded-in phones will ever find their way into landfills, either at home or abroad.

So the next time you are thinking of upgrading your smartphone, add ‘best trade-in offer’ to your checklist of things to think about. It could save you a lot of money!

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