May 30, 2008

Green Warranties, Part Three:

To help the environment, extended warranty administrators are stepping up to offer customers gift cards in return for their waste computers and cameras and more energy-efficient replacements for their unrepairable home appliances.

Extended warranty companies are beginning to take leadership in efforts to recycle electronics and encourage the use of more energy-efficient appliances.

Home Warranty of America Inc. is allowing its customers to pay an optional $75 "GreenPlus" fee to secure an endorsement to their policies that ensures their appliances will be replaced with Energy Star rated models. NEW Customer Service Companies Inc. (a Warranty Week sponsor) is working with Sam's Club to allow members to collect a gift card as a reward for sending in their computers and cameras for recycling.

The latter program, run under the brand name of ecoNEW, allows Sam's Club members to send in any of seven different types of electronic equipment for free recycling. But if the item contains parts or components that can be resold or reused in current generations of equipment, the customer could qualify for a gift card valued from $4 all the way up to $1,124.

The European Union seems to have anticipated these kinds of recycling rewards. In the EU's WEEE directive on waste electrical and electronic equipment (Directive 2002/96/EC), the actual wording used to describe the cost of recycling is thus: "private households should be able to return their waste at least free of charge."

Turning Trash Into Cash

In other words, WEEE discourages payments by the household to the recycler, but actually permits and encourages payments by the recycler to the household. If no money changes hands, that's fine too. But by repeating the key phrase "at least free of charge" four times in the directive, we think the EU is encouraging money to change hands in the form of a bounty paid by the recycler.

The ecoNEW program, however, is a U.S.-only effort. Sam's Club is the only NEW client taking part in the program right now, though others could join at any time. Jamie Breneman, NEW's communications manager, said the program was created to combat not only the amount of electronics junk accumulating in people's closets, but also the growing volume of junk finding its way into landfills. The problem is, consumers don't know the value of some of the spare parts in their junk, and don't have a realistic avenue open to them for sales of used electronics (eBay and Craig's List notwithstanding).

"A lot of this product has value, whether it's going into the resale market, or whether it's getting stripped down for component-level parts," she said. "You think about all of those products out there that are breaking down, and there's not a good parts source for them. So we're able to populate the parts channel. And then also, you can smelt it down and reuse it to make new materials."

Breneman stressed that NEW will have an "absolute no landfill policy," even when it will cost the company to recycle the unit. She said NEW also will not ship units internationally for others to dispose of in less than environmentally friendly ways. "So if we're not reselling it, it isn't going to become someone else's problem," she added.

Although Sam's Club is the only announced ecoNEW partner right now, Breneman said both retailers and manufacturers are preparing to do likewise. And although Sam's Club is an online/UPS-only effort with no in-store drop-off options, others may allow that. Some retailers, in fact, may create high profile drop-off events in certain cities and towns -- a garage sale in reverse -- encouraging consumers to recycle their electronic junk at least free of charge and possibly, in return for a gift card.

New Focus on the Environment

This environmental focus on the part of the extended warranty companies is a relatively new phenomenon. NEW first announced the availability of the ecoNEW program at the Consumer Electronics Show in January, and announced Sam's Club as its first ecoNEW client at the end of April. Home Warranty of America announced the GreenPlus option at the beginning of March.

Home Warranty of America's GreenPlus option provides replacement of appliances and home heating systems with new Energy Star rated units, once it has been decided that the old unit cannot be repaired. To qualify for the Energy Star designation, products must use significantly less electricity than is typical for their category, and must meet other criteria as well (see Warranty Week, May 21 for more details). Product types eligible for the GreenPlus option include:

  • Dishwashers
  • Refrigerators
  • Clothes Washers
  • Heating Systems (with 90% efficiency)
  • Water Heaters (with a tankless water heater)
  • Ovens, Ranges & Cook Tops

The option can be added to a home warranty policy for an additional $75 fee. Home Warranty of America has made the option available to consumers through its real estate agent channel (which sell policies to consumers buying or selling a home) as well as through direct-to-consumer sales (for those purchasing or renewing a policy on their own).

Most of the company's home warranty policies include a 13 SEER equipment upgrade clause as a standard feature. In addition, Home Warranty of America also sells a "13 SEER Modifications" option for an additional $50 or $75 fee (depending upon the state where the home is located), which can cover the cost of moving a unit, cutting through the foundation, or any other alterations that would have to be made above and beyond the replacement of the actual unit.

The idea is to replace old and less energy-efficient HVAC systems with units meeting U.S. Department of Energy criteria for a seasonal energy efficiency ratio of 130% (13 SEER). To qualify for an Energy Star rating, an HVAC system must meet a ratio of 14 SEER (see Warranty Week, May 21 for more details).

Online Only

Right now, the Sam's Club Trade-In and Recycle Program is available only to Sam's Club members who have registered at samsclub.com. However, the transaction itself will be negotiated and completed between the customer and ecoNEW, without any further involvement from Sam's Club. The Web site is operated by NEW. But the gift cards can be traded for Sam's Club merchandise or used to pay membership fees. It has no expiration date.

Items cannot be returned in person to a Sam's Club location. Instead, they must be shipped to ecoNEW via UPS, using a prepaid shipping label that ecoNEW will email to the customer. Only one item may be shipped per box, because each returned item is issued a unique voucher and tracking number to insure traceability in transit and to speed identification once received at the ecoNEW warehouse.

After a customer submits all the required information on the ecoNEW Web site, NEW will send an initial email message to the customer. Within this first email will be a unique link which the customer must click to confirm their email address. Immediately after confirming their email address, ecoNEW will generate a second email containing a pre-paid UPS shipping label, which the customer must then print out and bring to a UPS Store, along with the unit to be returned. While the UPS staff will be available to help with the packaging of the unit, the cost of packing materials must be paid by the customer.

If the product appears to have been damaged in transit (i.e. the box it's in appears to have been damaged), ecoNEW will resolve the matter by making a claim to UPS. However, if the box is not damaged, but the unit inside is, ecoNEW will contact the customer to resolve the matter.

Trade-in values assume the unit is in operable condition. ecoNEW asks the customer to describe specific defects or damages to the product, so that appropriate deductions can be made. If ecoNEW determines that the actual condition differs materially from that described by the customer, it reserves the right to recalculate its value using the deduction schedule available to the customer at the time a quote was obtained. If the customer disagrees with this recalculation, ecoNEW will return the item to the customer at no cost.

Trade-in values will be updated on a monthly basis. However, all trade-in values quoted to potential customers will remain valid for 10 days. After that time period expires, a new quote will need to be obtained. Once a quote has been obtained, and ecoNEW has sent a shipping label, the customer has 30 days to return the product. If 30 days passes and no product has been received, ecoNEW reserves the right to recalculate its trade-in value.

According to the ecoNEW Web site, "All equipment received by ecoNEW will either be reconditioned or recycled. Some equipment may be sold into the secondary, or used, marketplace, in its whole machine form and some equipment may be disassembled and sold off as usable service parts. Recycled equipment will be broken down into its raw material format and used to produce new materials."

Data Destruction

The ecoNEW program is currently accepting returns of used computers, camcorders, digital cameras, flat screen monitors, video game consoles, and digital music players. While some of the newest and most feature-rich models can command payments of up to $1,124 (for the Sony HVR-V1U camcorder), many of the oldest and outdated units command a trade-in price of $0. Printers will be accepted for free recycling, but will not be eligible for a gift card. CRT monitors will not be accepted at all.

Customers are asked to delete all of their personal data files before sending in their old units. Some of these units may need only minor repairs before they're resold to others as used merchandise. And while that may not be an issue with music files, it could cause some problems with the documents typically left on the hard drives of discarded computers.

On the ecoNEW Web site, the company "strongly recommends that you back up your data and/or erase the data from your products hard drive or memory. ecoNEW will make reasonable efforts to erase all data from any product that is submitted through the program, but cannot make any guarantee in this regard. Any files or data left on your product may be accessible to others if the data is not erased. ecoNEW shall not be responsible for the loss, safekeeping, or maintenance in confidence of any data resident on the trade-in products.

"If applicable, please consult your products operating system software manual for recommendations on backing up or deleting files, or contact your operating system software manufacturer for suggestions on how to secure personal data.

"ecoNEW employs a program that is certified for compliance with the rules mandated by the National Industrial Security Program Operating Manual (DOD 5220.22-M) to completely erase and make irretrievable any information contained on a fixed or removable hard disk drive.

"All addressable locations on the hard drive are overwritten with a character, then its complement character, then a random character, and then verified. This process is outlined in DOD 5220.22-M Sanitization Schedule. This process is sufficient for all governmental information deemed Classified, Sensitive, and Secret.

"Drives that malfunction in a way that makes it impossible to access and destroy the data are noted by serial number and sent for destruction. All tasks in this regard are performed in a controlled and secure environment."

Placing a Value on Recycling

In a very meaningful way, the prices listed below for computers and camcorders make a statement about the current value of the units in terms of the scarcity and usability of the spare parts, as well as the relative value and quality in some cases of the brands themselves. Sony camcorders, for instance, seem to command a premium price for trade-ins, while for other camcorders the brand name doesn't seem to matter. And in the case of monitors, which one might have suspected were interchangeable commodities, the lack of brand-based pricing differentials seems to confirm that suspicion.

The actual prices offered for laptop and desktop computers tend to depend upon two factors: the central processing unit (CPU) and the presence of a hard disk drive. It doesn't seem to depend much upon the brand of the computer itself, although of course different manufacturers favored different CPUs.

In general, the oldest Pentium and AMD K6-based units fared worse when it came to trade-in value, while the newest and fastest Intel Core Duo processors used in the custom-built Alienware gaming computers commanded the highest trade-in prices. Within each family of CPUs, the faster the processing speed, the higher the price offered. All the prices below reflect the inclusion of a salvageable hard drive; its absence could reduce the trade-in price all the way to $0.

Looks Like New

Data in the charts below was collected from the Sam's Club Trade-in and Recycle Program Web site on May 30, 2008. In all cases, we assumed we were pricing complete units with typical configurations in a gently used condition. The actual prices offered to Sam's Club members are likely to change in the future based upon market conditions.

Table 1
ecoNEW Trade-in Prices for Laptop Computers

  Laptop CPU Lowest Price   Highest Price
  Athlon 4 $56 $100
  Athlon XP $96 $120
  Athlon XP-M $96 $120
  Athlon $100 $120
  Athlon 64 $100 $140
  Athlon 64 Mobile $100 $140
  Mobile Celeron $88 $88
  Celeron $8 $116
  Celeron M $100 $116
  Celeron M Centrino $112 $140
  Celeron D $136 $164
  Core Solo $176 $232
  Core Duo $220 $360
  Core 2 Duo $360 $440
  Duron $0 $56
  Mobile Duron $72 $72
  K6-2-P $0 $0
  K6-III+ $0 $0
  K6-III-P $0 $0
  K6-2 $0 $32
  K6-2+ $0 $32
  Motorola Dual-Core PowerPC G5 $0 $0
  Motorola Power PC G3 $16 $32
  Motorola Power PC G4 $24 $56
  Motorola PowerPC G5 $64 $120
  Motorola PowerPC $32 $144
  Motorola Power PC G4 (2 CPU) $160 $240
  Motorola Power PC G5 (2 CPU) $160 $320
  Pentium $0 $0
  Pentium II $0 $0
  Pentium MMX $0 $0
  Pentium III $0 $56
  Pentium III-M $0 $56
  Pentium M $60 $112
  Mobile Pentium 4 $120 $176
  Pentium 4 $128 $196
  Pentium 4-M $128 $196
  Pentium M Centrino $152 $300
  Mobile Sempron $0 $0
  Sempron $140 $140
  Turion 64 $128 $128
  Xeon 5100 Dual-Core $0 $0

There were only about half as many CPUs listed for desktop units as there were for laptops, and prices were much lower. For instance, not one desktop unit on the ecoNEW price list below would fetch more than $100. Once again, the CPU type and speed seemed to matter more than the brand name of the computer, so we'll list them that way.

Table 2
ecoNEW Trade-in Prices for Desktop Computers

  Desktop CPU Lowest Price   Highest Price
  Athlon $0 $12
  Athlon 64 $12 $24
  Athlon FX $24 $24
  Athlon XP $28 $40
  Athlon X2 $48 $76
  Celeron M $0 $16
  Celeron $0 $24
  Core Solo $32 $40
  Core Duo $48 $48
  Core 2 Duo $56 $72
  Duron $0 $0
  Motorola PowerPC G3 $6 $9
  Motorola PowerPC G4 $9 $24
  Motorola PowerPC G4 (2 CPU) $12 $26
  Motorola Dual-Core PowerPC G5 $37 $52
  Motorola PowerPC G5 $48 $78
  Motorola PowerPC G5 (2 CPU) $52 $78
  Pentium $0 $0
  Pentium II $0 $0
  Pentium III $0 $12
  Pentium M $8 $48
  Pentium 4 $12 $56
  Pentium D $32 $56
  Xeon 5100 Dual-Core $44 $48
  Xeon 5300 Dual-Core $60 $60
  Xeon $24 $80

The old-style tube monitors are not currently accepted for recycling by ecoNEW. Printers are accepted for free recycling, but there are no printers that will command a trade-in price. Flat screen monitors, however, are gladly accepted. And once again, the actual brand of the monitor matters little. So what we've done here is to reduce the offerings to a series of screen sizes, measured diagonally in inches.

Table 3
ecoNEW Trade-in Prices for Flat Screen Monitors

Monitor Size Price
  up to 15" $0
  16" $8
  17" $12
  18" $20
  19" $28
  20" $52
  21" $64
  22" $76
  23" & up $92
Camcorder trade-in prices were similarly generic, with one exception. While the price offered for most brands depended less on the brand and more on the recording format, the prices listed for Sony camcorders were model-specific. So we'll list them in two groups: everyone else and Sony.

Table 4
ecoNEW Trade-in Prices for Camcorders

Camcorder Type Price
  Analog 8mm $4
  Analog Super VHS-C $4
  Analog Super VHS $4
  Analog VHS $4
  Analog VHS-C $4
  Analog Hi-8 $16
  Digital Digital 8 $24
  Digital MiniDV $24
  Digital DV $32
  Digital DVD $60
  Digital HDD 20 GB $60
  Digital MicroMV $60
  Digital Memory Stick Pro Duo $80
  Digital HDD 30 GB $92
  Digital HDD 40 GB $112
  Digital HDD 60 GB $160

Sony makes digital camcorders powered by four different recording formats: an internal hard drive, Memory Stick flash memory, MicroMV tape, and MiniDV tape. Any hard drive-powered Sony model is going to command a trade-in value of $200 to $400, while a tape-based Sony camcorder can fetch anywhere from $100 to over $1,100. There was only one Memory Stick model listed on the ecoNEW Camcorder Value Estimator Web page, but it commanded a respectable $300 trade-in value.

Table 5
ecoNEW Trade-in Prices for Sony Camcorders

Camcorder Type & Model Price

Hard Drive-based Units
$
  Sony DCR-SR220 $204
  Sony DCR-SR300C $228
  Sony HDR-SR5 $228
  Sony HDR-SR10 $240
  Sony HDR-SR1E $279
  Sony HDR-SR11 $288
  306;Sony HDR-SR8E $306
  Sony HDR-SR12 $324
  Sony HDR-SR7 $390

Memory Stick Pro Duo-based Unit
  Sony HDR-CX7 $300

MicroMV-based Units
  Sony DCR-IP5 $96
  Sony DCR-IP7 $96
  Sony DCR-IP220 $98
  Sony DCR-IP1 $152

MiniDV-based Units
  Sony DCR-PC101 $106
  Sony DCR-TRV80 $128
  Sony DCR-HC90 $130
  Sony DCR-PC9 $138
  Sony DCR-TRV50 $157
  Sony HDR-UX7E $189
  Sony DCR-DVD200E $190
  Sony DCR-DVD908 $192
  Sony HDR-UX1 $192
  Sony HDR-UX10 $192
  Sony DCR-DVD403 $199
  Sony HDR-HC9 $216
  Sony DCR-HC1000 $221
  Sony DCR-TRV830 $223
  Sony HDR-HC7E $228
  Sony HDR-UX20 $240
  Sony DCR-TRV900 $262
  Sony HDR-SR1 $279
  Sony DCR-TRV70 $329
  Sony DCR-TRV950 $332
  Sony DCR-PC1000 $344
  Sony HVR-A1E $384
  Sony DCR-VX1000 $430
  Sony DCR-VX2000 $488
  Sony DSR-PD150 $556
  Sony DSR-PD170P $612
  Sony DCR-VX2100E $720
  Sony HVR-Z1E $787
  Sony HDR-FX1E $855
  Sony HDR-FX7 $929
  Sony DSR-250P $978
  Sony HDR-FX1 $982
  Sony HVR-V1U $1,124

Digital camera prices depended heavily upon the make and model of the unit, resulting in lengthy price lists that we won't repeat here. In general, the least valued point-and-shoot digital camera brands included Agfa, Cool-Icam, D-Link, JVC, Largan, Microtek, Oregon Scientific, Sipix, Umax, and Yashica, according to the ecoNEW Value Estimator.

The point-and-shoot camera brands that commanded the highest prices included Canon, Casio, Kodak, Leica, Minox, Nikon, Norcent, Panasonic, Pentax, Samsung, and Sony. Those that fell somewhere in the middle included units made by Argus, BenQ, Concord, Contax, DXG, Epson, Fujifilm, Gateway, GE, Hitachi, HP, Intova, Isonic, Jenoptik, Konica, Kyocera, Minolta, Mustek, Olympus, Polaroid, Premier, Real Digital, Ricoh, Rollei, Sanyo, Sealife, Toshiba, Uniden, VistaQuest, Vivitar, and Vupoint.

Among digital single-lens reflex (SLR) camera models, there were two brands -- Minolta and Contax -- that commanded relatively low prices and five brands -- Canon, Fujifilm, Kodak, Nikon, and Sigma -- that commanded relatively high prices. Then there were six brands that fell somewhere in between: Leica, Olympus, Panasonic, Pentax, Samsung, and Sony.

Questions about ecoNEW can be answered by phone at 1-866-233-4246 (weekdays, 9am to 6pm EST) or by email at recycleortrade@econewonline.com.





AMT Warranty Corp.
Fulcrum Analytics
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