Upgrading Your Cell Phone
Most consumers in the US upgrade to a new cell phone once every year two years. Although most of us don’t need and won’t use the latest in mobile technology, a majority of subscribers will purchase the newest iPhone or Google phone as soon as they are eligible for an upgrade from their mobile service provider.
When your contract is up (usually 2 years), you are eligible for “upgrade pricing” on a new phone. Upgrade pricing is the price that is shown when you look at the mobile service provider’s web site and the price is in big letters. The price of the new phone will vary from “Free” to over $200, depending on what phone you choose to get. If you upgrade your phone, you will be required to sign a new contract to get that pricing (generally 2 years).
The reason for the contract is that the phone company is paying part (or all, in the case of a “Free” phone) of the price of the phone in exchange for “locking” you into your current plan for the next 2 years. Part of every bill you are paying goes to that cost of the phone. If you are using your phone “out of contract” the phone companies LOVE it, because they don’t have to contribute money to a new phone for you.
For example, I want an iPhone. If I go to the Apple Store, their base model phone will cost me $649. However, if I go to the Verizon Wireless store and sign a new contract for 2-year mobile service plan, Verizon will sell me the iPhone for only $200. In this scenario, Verizon Wireless is paying Apple the full $649 for the phone. But they are only charging me, the consumer, a subsidized (lower) price in return for 24 monthly payments towards a wireless service plan.
Why Sell Your Old Cell Phone?
After your 2-year contract expires, your mobile service provider will allow you to purchase a brand new phone at a subsidized price, in exchange for an agreement of another 2-year contract. If you choose to upgrade, which you are not required to do, you can purchase a new phone and your previous phone will be disconnected from your phone number. If you just bought the newest iPhone, then your older iPhone is going to be unused, sitting in your closet collecting dust.
Almost all consumer products depreciate over time. So your old iPhone which is now 2 years old, is not worth $649 anymore. But it’s still worth something, and very likely it’s worth a lot more than $0. Instead of storing your old iPhone in your closet where it isn’t being used, why not sell it now when its value is higher today than it will be tomorrow? When I upgraded to an iPhone 5, I sold my 32 gb iPhone 4S on eBay for $400. Even though it cost me $300 to upgrade with Verizon Wireless, I actually made a profit after selling my old phone.
So who is actually buying all of these used cell phones? On any given day, there are over 100,000 phones listed for sale on eBay. Is the used cell phone market large enough to support 100,000 people buying cell phones every day? The answer is YES. Every time someone breaks or loses their phone, or is victim to cell phone theft, they will need to buy a new one. Most subscribers have insurance on their phone, but if you aren’t insured and you aren’t due for a new 2-year contract, then you will have to pay full price from the phone manufacturer. Buying a pre-owned phone is the less expensive solution.
Let’s pretend I renewed my 2-year contract with Verizon Wireless last month and bought a brand new iPhone 5 for $200. This morning, I dropped my iPhone in the pool and it no longer works. I don’t pay for cell phone insurance so I don’t qualify for a replacement. Because I still have 23 months left on my contract, If I go to the Verizon Wireless or Apple store, they will charge me the full price of $649 for a brand new replacement iPhone. It seems I am out of luck. Except I’m not. I can go on eBay and buy a used iPhone 5 for $400 which saves me $249 off of the Apple price tag for a brand new phone. This example is exactly why their is a marketplace for used cell phones. If $400 is out of my budget, I can buy an older model iPhone for $200. Either way, it beats paying full price from the manufacturer.
Additionally, there are consumers who always want a new phone even if their current phone works fine. Tech-savvy consumers want to have the newest technology on the market. So they are always buying new phones. If they are up for a new contract, it works in their favor. But when a new must-have phone is available and they aren’t due for a new contract, they resort to one of the many marketplaces to buy used cell phones.
Don’t forget that not everyone uses a smartphone yet. So if you have a few flip phones hidden away under your bed, don’t hesitate to see how much money you can get for them. There are buyers out there that still use “dumbphones”. Even broken or water-damaged phones hold value. There are buyers who are looking for non-working cell phones to strip for parts.
Preparing To Sell Your Used Cell Phone
Before you sell your phone, you will want to take a few steps to increase the value of your phone and also to protect and secure your personal data.
First, you should transfer all of your storage and content from your old phone onto your new phone. Most mobile service providers can do this for free at one of their stores. Verizon Wireless, T-Mobile, Sprint, AT&T, and all of the other major wireless businesses have a large number of locations across the United States. If you want to perform this task on your own, it’s not too difficult either. You can transfer all of your data to a new iPhone as long as you sync your previous iPhone with iTunes on your computer. For Android phones, you can download all of your data to your computer and then upload to your new Google phone. As an alternative you, you can use Rerware’s MyBackup Pro, available in the Android App Store for $4 USD. I strongly recommend backing up your phone on a frequent basis even if you don’t plan on upgrading anytime soon.
Next you should clear all of your personal data and reset the operating system back to the default factory settings. This will return the phone’s software back to how it was when you first bought it. For security reasons, you want to remove and delete all of your data from the phone so the new owner won’t have access to your personal and private information. It’s unbelievable how many people will sell their phone without deleting their personal information and saved passwords. I personally keep my banking login, facebook, credit card, as well as several other important credentials saved on my phone. If this kind of data got into the wrong hands, it could potentially lead to identity theft issues. Selling your phone to a stranger as-is gives that stranger access all your music, email, text messages, and other data for the cost of buying your phone.
The way in which you delete data differs based on your cell phone and your carrier. For example, GSM phones can store the address book data on the SIM card. These cards make it easier when a user upgrades their phone provided they still use a GSM carrier. These phones still allow users to write data to parts other than the SIM card. When you decide to upgrade the phone, look at the type of data your present phone allows. Many people make the mistake of just deleting phone numbers. Today’s smart phones allow you to save much more such as:
- Phone logs
- Voice notes and recordings
- SMS messages
- Application data
- Email attachments
Each of the above items could contain personal or confidential information. While your goal is to protect your data, you’re also protecting other people. You probably would be annoyed if your contact information were revealed.
Your best solution is to find a way to overwrite the data on the phone or reformat it. If you simply delete the data, it still can be retrieved with third party tools. Here are some resources to help you find the correct steps to remove or reformat:
Cell phone manuals – Yes, I know. We rarely keep this item but sometimes you can find an online version that is available from your cell provider. Look in the index for items such as “delete data” or “reformat device”
Cell phone manufacturer’s website – These sites tend to be overlooked and often times have just the info we need. In doing a quick scan, I found Palm had an article called Performing a Factory reset for the Treo devices. Sometimes vendors like Nokia, have specific reformat instructions based on the phone and carrier.
Cell carrier or their website – No promises here, but these folks can provide some answers. If you plan to change carriers and maintain your contact lists on a hosted system, you should ask how to delete those records too.
iPhone on iOS Operating System:
- Tap the Home Button to return to the home screen
- Press the “Settings” icon
- Select “General”
- Select “Reset”
- Tap “Erase All Content and Settings”
Most BlackBerry Devices:
- Open Device Menu
- Click “Options”
- Click “Security”
- Click “Wipe Handheld”
- Click “Continue”
- Type “blackberry” as prompted
- This will initiate the erasing process, do not turn your handheld off
Most Android Devices:
- Return to the Home Screen
- Tap “Settings”
- Tap “Privacy”
- Tap “Factory Data Reset”
- Tap “Reset Phone”
Windows Operating System Device:
- Access the Settings option from the live tile or from the app list.
- In the Settings page, scroll down to the bottom and choose about.
- In the about page, there will be a reset your phone button at the bottom of the page. Click on this button to continue.
- Choose Yes when you see the warning message.
After you delete your data and reset it to the factory settings, you’ll want to deactivate the phone from your mobile service provider. If you’ve already bought a new phone and have activated it to your phone number then you can skip this step. If you are selling your phone before buying a new one then you should deactivate it from your phone number so the buyer can’t make calls with your phone with your service.
First, if you’re on AT&T or the T-Mobile network, just remove your SIM card. It’s as easy as that. They should already have a SIM card from their old phone that they can pop in, and you’ll do the same with your new phone. No big deal. If you’re using a Verizon Wireless or Sprint phone you can call your service provider, go to your local service store, or login to your account on your service provider’s website.
The last part of preparing your phone is to gather all the original materials that your phone was sold with. Providing all accessories, manuals, and original boxing will increase the value of your phone. This includes charging cables, earphones, instructions, etc. Additionally you’ll want to clean your phone. Wipe off the screen and remove any smudge marks.
Selling Your Used Phone
Now that your phone is ready to be sold, it’s time to get it out on the market. There are several different ways to sell your phone:
Online Marketplaces – Online marketplaces are a great way to list your phone for buyers to find. These websites connect buyers and sellers and take a fee for the transaction. Some great marketplaces include eBay.com, Swappa.com, and Amazon.com. Online marketplaces include auctions and ‘Buy It Now’ options. With a traditional auction, you sell your phone to the highest bidder. If you choose ‘Buy It Now’, you choose a fixed price for your phone. Generally, you list your phone for sale, include pictures and a price. If a buyer is interested, they can purchase the phone from you through the website. The website handles the transaction and provides you, the seller, with the online payment and the buyer’s information. Usually the payment is made with PayPal or another method that can be deposited into your personal bank account. After the sale, you must ship the phone to the buyer. To complete the transaction, the buyer and seller have the opportunity to leave feedback based on their experience with the other party.
Offline Classifieds – If you are not comfortable using an online marketplace, you can sell your phone locally for cash. While the benefit is that you can avoid the marketplace fee and don’t have to worry about online payment transactions, the downside is that you have to meet the buyer in person. Be careful when meeting someone in person, and always meet in a public location such as a coffee shop. The most popular offline classifieds section is Craigslist. You can list your phone on the Craigslist website and then you can receive emails or phone calls from any interested parties.
Online Buyback Programs – Online Buyback programs are websites that will buy back your cell phone from you. On a BuyBack website, you can select your phone’s manufacturer and model, as well as the condition. The BuyBack website will calculate an offer for your phone within a few seconds. If you choose to accept the offer, they will mail you a pre-paid postage box to ship your phone in. Once they confirm the quality of your phone, they will send you a check for the offer price. There are hundreds of online BuyBack programs, some of the more popular websites include Gazelle and Technollo. uSell is a great website that compares the BuyBack offers for your current phone so you can see which program will give you the most money.
In-store Buyback Programs – Several electronics stores offer buyback programs for their customers. Stores such as Best Buy, Verizon, T-Mobile, AT&T, Sprint, Radio Shack, Game Stop, Walmart, and Target offer customers a gift card or store credit in exchange for their cell phones. Some malls even have vending machines that will scan you phone and offer you cash on the spot.
|Least Risky||Little Risk||Slightly Risky||Moderately Risky|
|In-Store BuyBack Program||Online BuyBack Program||Online Marketplace||Offline Classifieds|
|There is little to no-risk when you sell you phone to a well-known retail outlet. The store will inspect your phone on site and will immediately make you an offer and grant you a gift card or store credit.||As long as you use a BuyBack website that has great reviews and customer service there is very little risk here. Just make sure to conduct your due diligence on the website you are using and see what other consumers think about their business. CellSolo is a great resource to find reputable BuyBack programs.||If you are selling your phone online to a buyer, make sure you protect yourself as a buyer. Only use trusted payment gateways and make sure you qualify for seller protection. Avoid fraudulent buyers by investigating their previous feedback and only use trusted marketplaces and auction websites. When shipping make sure you insure the package and request signature upon delivery.||When listing your phone for sale on a classifieds directory, you will receive a lot of spam and fraud emails. Make sure you filter out all the questionable buyers and only meet in a public location and only accept cash as a payment. This method will bring in a lot of low-ball offers so negotiate accordingly.|
|Worst Offer ($)||Decent Offer ($$)||Good Offer ($$$)||Best Offer ($$$$)|
|In-Store BuyBack Program||Online BuyBack Program||Offline Classifieds||Online Marketplace|
|In-Store offers are the lowest and sometimes there is a fee just to be eligible for the program.||These sites tend to rate phones by condition, and the lines between condition assessments can be blurry, such that devices are often "requoted" to a lower price once they are received by the company. You should expect to be paid, but make sure your phone fits the exact description implied at the time of sale.||When you find a buyer locally, you don't have to worry about shipping charges or fees and you get paid in Cash. Most classifieds have a large quantity of buyers for newer cell phones.||Online marketplaces supply buyers from all over the world so there is a higher demand for your phone. Higher demand means higher value. You can get the most money for you phone online but don't forget about the transaction fees and shipping prices.|
|Least Convenient||Moderately Convenient||Very Convenient||Most Convenient|
|Online Marketplace||Offline Classifieds||Online BuyBack Program||In-Store BuyBack Program|
|When listing a phone for sale online, you will have to take pictures, write a thorough description, arrange the payment, and ship the phone.||Offline classifieds involve filtering through several spam emails. Then once you find a buyer you have to meet somewhere.||After just a few steps on the website, the program will make you an offer. Most programs will mail you pre-paid postage. This method avoids the hassle of finding a buyer.||Simply drive to your local electronics store, trade-in your cell phone, walk out with store credit. It's simple and easy, and doesn't require shipping, taking pictures of your phone, or meeting with strangers.|
To illustrate how much value your phone is worth I have investigated how much money you can get from four sources. I decided to use a 16 gb iPhone 5 in “like New” condition for this experiment. I drove to my local mall and Game Stop offered me $310 cash for the phone. Gazelle’s website offered $320. The average price for the same phone on Craigslist was listed at $415. And the average phone in the same condition on eBay was being bid at $450.
Tips For Selling Your Phone On A Fixed-Price Or Auction Marketplace
- Check out the selling and payment processing fees of the marketplace. Some websites will charge you a fee to add pictures or use a reserve price. Calculate what your fees will be before selling online.
- Only ship to the buyer’s confirmed Paypal address if using Paypal.
- If you list your product for sale online, make sure you are available to ship it when it sells.
- Post high quality photos and include a detailed description of your phone. Make sure to include information about wear and tear as well as any damage that has occurred.
- When shipping your phone, insure your package, and require signature upon delivery.
- Check a buyer’s feedback before shipping your phone. If it looks suspect, contact the marketplace support.
Tips For Selling Your Phone In Your Local Classifieds
- Use descriptive keywords in your listing so buyers can find your phone.
- Don’t include your personal identity or home address in your listing.
- Watch out for email scams, spam, and all other fraud.
- Don’t give in to the low ball offers right away.
- Include high quality pictures and descriptive content.
What Is Your Cell Phone Worth?
The best way to determine what your cell phone is worth is to look at what other people are selling the same phone model for. I recommend starting on eBay. Search for your exact phone model. Within those search results, sort the listings by ‘Time: Ending Soonest’. This will show you how much money buyers are bidding on your exact phone. You can also search Craigslist for your phone model to see what other people are choosing for a selling price.
When Is The Best Time To Sell My Phone?
This is an easy answer. The sooner you sell your phone, the more cash you will receive in return. Your phone will depreciate over time so why hold onto it longer than you need it? I prefer to sell my previous phone immediately after upgrading to a new phone.
It is easier than ever to sell a used cell phone, with more businesses buying used cell phones to sell in secondary markets. Sell your old phones and earn some extra cash! Check out the CellSolo Resources page for additional websites to trade-in your used cell phone.