Every year, millions of consumers answer the call to upgrade their cell phones—and that means deciding what to do with the used cell phone being replaced. Some people reuse their cell phones by giving them to another family member or saving them in case the new phone happens to break. Others simply toss their old cell phones into the trash, even though such electronics have materials that shouldn’t be in landfills. What else can consumers do with their old phones?

One option is to trade it in. Retailers such as Target, Costco, Radio Shack, and Amazon.com have trade-in programs that give consumers store credit for used cell phones in decent shape. Another option is to sell the old phone. Sometimes the sale is to an individual, handled privately or via sites such as eBay. More often, consumers prefer the convenience of selling to a business that refurbishes and resells electronic goods (or recycles them responsibly if they have no resale value). Michigan-based ReCellular is among the market leaders in this industry, with $100 million in annual revenue. Consumers click to the company’s web site, look up the phone’s make and model, indicate the condition of the phone, and see how much ReCellular will pay for it. To complete the transaction, they download a prepaid shipping label and send the phone to ReCellular, which confirms the condition and then mails payment. The company deletes any personal data, makes any needed repairs, replaces worn or missing parts, tests the phones to ensure they’re in good working order, and then sells them to consumers in domestic and international markets.

Businesses like ReCellular are thriving as the world emerges from recession and consumers seek to cash in on unused goods. Today’s cell phones are more sophisticated than the phones of just a few years ago, which means they’re worth more when sold. Even basic models can fetch some money because there is always some level of demand for low-priced, no-frills used phones. ReCellular handles more than five million old phones every year, selling more than half of its refurbished units to U.S. consumers and the remainder to distributors in developing countries.

There are also other disposition possibilities for old phones. A growing number of nonprofits are appealing for used cell phones they can sell to raise money for worthy causes. Hope Phones and several other groups recently banded together to collect 20,000 used cell phones, with the goal of buying prenatal medical equipment to use in Nepal and the Democratic Republic of Congo. “If you can help save a woman and give her a chance to have a healthy baby by simply donating a phone,” says a manager at the United Nations Foundation, which is involved in the effort, “that’s a powerful opportunity for you to engage and connect with someone else.”   

Cell Phones for Soldiers, founded in 2004, asks consumers to donate used cell phones as a fundraiser for buying phone cards for U.S. military members stationed far from home. The 2,000 U.S. AT&T stores are among the many collection points, and AT&T provides free downloadable shipping labels for consumers who can’t get to a store to drop off phones in person. Every year, the charity raises enough money to send phone cards with a combined value of more than 10 million minutes of talk time so American men and women in uniform all around the world can call family and friends for free.

In the end, whether reused, resold, recycled, or donated, outdated cell phones have a value and a future somewhere in the world.[i]

Case Questions (Each question is worth 25 points)

1. The quote from a U.N. Foundation manager talks about donating a cell phone as a “powerful opportunity . . . to engage and connect with someone else.” Does this quote refer to motivation, ability, or opportunity to recycle a cell phone by donating it? Explain your answer.

2. How do the concepts of physical and emotional detachment apply to the way consumers decide to dispose of their used cell phones?

3. Why would Amazon.com, which has no physical retailing presence, be as interested in encouraging cell phone trade-ins as Radio Shack and Target?

4. Once consumers have sold their used phones to a company like ReCellular, how is learning likely to affect their beliefs about this disposition option?