Is Refurbished or Remanufactured a Good Deal?

Sometimes people ask me questions that aren’t exactly my area of specialty.  While saving money by buying a refurbished or remanufactured product is technically about spending and personal finance, there is a lot of information that goes into such a decision that I have no way of knowing any better than you. With that being said, there are some common issues and concerns to watch out for when purchasing refurbished or remanufactured goods.

Is It Really A Good Price?

The promise of refurbished goods, particularly electronics, is getting a “good as new” product for a much lower price.  The devil, of course, is in the details.  The major concerns fall into two categories. The first is whether or not the refurbished product really IS as good as new.  And the second, is in what way the service and support of the product will be different because it is refurbished.

Many refurbished products come with a much shorter warranty than their new counterparts.  This begs the question, “If the product is as good as new, then why won’t you stand behind it with a warranty that is as good as the new one?”

The answer is, of course, that refurbished is NOT as good as new.  The product has had whatever defect caused it to be returned fixed, but that doesn’t mean it is new.  The customer who owned it before might have had it two days, two weeks, or two months before returning it.  That isn’t new, it is used, and that is reflected in the shorter warranty.

In order to determine whether or not that refurbished laptop, TV, or microwave is a good deal, you need to compare what you would get with a new purchase versus what you get with a refurbished purchase and then assign a value to the differences.

For example, if a new product comes with a 3-year warranty, but the refurbished product only comes with a 30-day warranty, that is a significant difference, and so the discount to the new price should be substantial. For some products you can purchase a Square Trade warranty, but be sure to add that to the cost when evaluating whether or not the price is a good deal.

On the other hand, the difference between a 12-month warranty and a 90-day warranty isn’t really that big (8 months), so the discount doesn’t have to be as big.

As a rule of thumb, the more likely the product is to need warranty service, the less likely a refurbished product is a good deal.  Ironically, these are the products most often offered as refurbished because there is a large supply of them from people sending them in for service.

Keep your eyes open and make smart decisions.  Don’t just go for it because it sounds cheap.  Make sure to look at all the angles and you’ll come out ahead.