Microsoft expands buyback deal to goose sales of Surface, Windows phones

Computerworld - Microsoft has expanded a buyback program intended to boost sales of Windows smartphones and tablets, and will pay up to $350 for a wide variety of rival hardware powered by Apple's iOS and Google's Android.

Stephen Baker, an analyst at the NPD Group who specializes in retail, applauded the deal. "This is clearly a marketing ploy, [but] they usually prove to be good programs for getting people into stores," said Baker.

The new program followed an earlier, more limited buyback deal that dealt only in Apple iPads. Customers can trade in a used iPad for a minimum of $200, with the funds placed on a gift card good for purchases at Microsoft's own retail stores.

Microsoft's expanded buyback accepts numerous rival devices, including smartphones and tablets running Android made by the likes of Samsung, Lenovo and others; Apple iPhones and iPads; and even BlackBerry smartphones.

Customers receive quotes online from Clover Wireless -- one of the many "re-commerce" companies bidding for used hardware that they then refurbish and resell, mainly in developing markets outside the U.S. -- and then ship their hardware along with proof of purchase of a Windows phone or tablet. Assuming everything's approved, Clover returns a prepaid Visa card loaded with the payment amount.

The caveat: Customers must first buy a Windows smartphone or tablet.

"The Microsoft device must have been purchased within thirty days of the date you ship your old device," the program's FAQ states. The new purchase does not have to be a Surface RT or Surface RT tablet, but can be a third-party Windows-based phone from Nokia, HTC, Huawei and Samsung; or a tablet made by Acer, Asus, Dell, Lenovo, Microsoft, Samsung, Sony and Toshiba.

Clover Wireless' quotes for used hardware were in line with those generated by other cash-back rivals. Clover quoted $75 for a used 16GB iPhone 4 running on Verizon's network, while Gazelle and NextWorth -- two popular buyback vendors -- offered $75 and $65 for the same device on Thursday.

Some critics panned the expanded program -- and earlier, the original -- saying that Microsoft was essentially paying for new customers, or trying to.

"Of course they are," retorted Baker. "That's the whole point of marketing and advertising. Whether it's rebates or buybacks or lower prices or advertising, companies pay for new customers. That's how things work."

Nor are Microsoft's buyback programs a mark of desperation, an easy-to-conclude analysis because the Redmond, Wash. company has struggled to sell its Surface tablets since their introduction last October.

"Anyone who says that knows nothing about consumer marketing, knows nothing about how to drive traffic into stores," said Baker, rejecting the desperation thesis. "These are smart moves, not stupid moves. If you're not doing something to drive traffic, that's a stupid move.

Buyback and trade-in programs are generally effective, Baker added, as long as the retailer doesn't use the tactic too often. "People are not always thinking of these opportunities, but they lose their effectiveness if you go to that well too often," said Baker.

While Microsoft's iPad buyback deal has an expiration date of Oct. 27, the expanded program run in conjunction with Clover Wireless has no apparent end date.

Microsoft's website contains more information about the buyback program and links to start the quote process.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

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