There's money to be made with your old cellphone

Westlake Village (CA) - According to market researchers, the average American is upgrading to a more advanced cellphone faster than ever before. Statistics tell us that we typically say Goodbye to our mobile phones every 20 months. But what actually happens to those millions of discarded phones? Well, not every phone ends up in a landfill: Many phones make a U-turn and are sold back into the market.

One of those companies that is taking advantage of cellphones that are discarded by consumers is ReCellular. Since 1991, the company has recycled millions of phones back into the marketplace. Currently, the company is handling 10,000 to 15,000 mobile phones each day at their Dexter, Mich. factory and about two-thirds of those phones are in a good enough condition to be sold back to the United States and third-world countries.

Working with retailers and mobile phone stores, ReCellular handles the logistics of shipping, inspecting and reconditioning of old phones. While some people may think recycling old phones back into the market may be as simple as patching up some nicks and scratches, Mike Newman, Vice President of ReCellular, told TG Daily that it's actually quite difficult. "We have to test every phone to see if it's cost effective to bring it back to market. We also have to match the phone to the market," says Newman.

Drop boxes and postage-paid envelopes are provided to stores that participate in ReCellular's recycling program. When consumers buy a new phone, store employees ask if they wish to turn in their old phones or drop them into the box. These discarded phones are then sent to ReCellular's Michigan factory, which is located just outside of Ann Arbor. There are 150 employees who sift through 10,000 to 15,000 phones a day and perform an initial three point check. "First they power it up, then they check the LCD screen and finally employees make a test call," explained Newman. Phones that fail any of the three initial tests are deemed to be too expensive to refurbish.

The factory receives a wide variety of phones and also some of the newest phones are showing up in large numbers. Even Newman is surprised about the models trickling in: "We receive several hundred Razr phones a month and those can be sold for a lot of money." He adds that the typical phone is around two to three years old. Old, brick style phones show up once in a while, he said.

Newman told us that two-thirds of the phones that reach the factory make it back into the market. "Half of those phones go overseas and to third world countries like Ghana or Peru," says Newman. The rest of the phones are sold into the US, Hong Kong and Latin American countries. Newman explained that one of the toughest things about reselling the phone is matching the technology to the market. "Some places like Latin America only use CDMA, while other places may use a certain band of GSM. Matching the phone to the country is one of the more difficult aspects of the process," says Newman.

Businesses that use ReCellular to recycle phones aren't doing it solely to be nice to the environment. The companies also get money for every viable phone. Often this extra revenue is donated to charity and one large retailer actually gives their money to the Boys and Girls Club of America. "We pay the retailers the market value for the phone which can be anywhere between 20 cents and $80," said Newman. While ReCellular won't pay for every phone model, the company currently pays for more than 500 different models. The average amount comes out to be around $5 to $10 per phone. There are no hard and fast rules that determine how much money a phone is worth, but Newmann said, "If it sells well new, then it should sell well used, but the longer the phones sit, the less value you have by the second. Just like vegetables, they'll rot on the shelf."

In addition to helping charities, companies are also complying with environmental waste disposal laws. On July 1st, California's Cell Phone Recycling Act of 2004 will take effect. This act makes it unlawful for retailers to sell mobile phones if they don't provide an easy way for consumers to turn in or dispose of their older phones. So far California is the only state to have passed such a law, but other states are looking into similar legislation.

While it is easy for consumers to forget about their old phone when they have picked up a new one, data security appears to be a growing concern. Modern cell phones can hold enormous amounts of addresses, phone numbers and other personal information. According to Newman, the storage of about half of the phones is erased at the Dexter Michigan factory and the rest should be erased at the factories that do the refurbishing. "We hope to get that number up to 90% at our factory in the future," says Newman. However, he recoimmend users to erase all personal data when they are discarding their phone. ReCellular offers advice on its website on how to erase data from a cellphone. "It's common sense to erase data and gives people peace of mind," says Newman.