Where Your Gadgets Go to Die

Hardware recycling programs offer an easy way to get rid of old PCs or phones. But at what cost to privacy and the environment?

Five years ago, when Best Buy approached Electronic Recyclers International to start a pilot recycling program in 100 of its stores, other retailers considered them heretics.

“People said, ‘Oh my God, these guys are nuts,’” recalls John Shegerian, CEO of Electronic Recyclers, one of the largest electronic waste recyclers in the U.S. “Fast-forward to 2010. All the Best Buy stores have the program, 40 million-60 million people have dropped off [their used] electronics and over 50 percent of those people bought something new. Electronic waste is the fastest-growing business in the world.”

Shegerian might be animated for a CEO, but he has reason to be excited. According to a forecast released at the Consumer Electronics Show last week, the high-tech goods trade will hit $1 trillion this year—and every new gadget bought means an old one with nowhere to go. The Environmental Protection Agency estimates that in 2010, Americans owned 2.4 million tons of electronic stuff they didn’t want. It’s all given rise to a veritable posse of recyclers promising quick cash for used computers and electronic gadgets.

“You know, it’s pretty simple,” chirps the lady in the TV spots for Gazelle (a recycler that does business with the public and with retailers like Walmart—and one of several with a booth at CES). “You want the new iPhone; we’ll pay you for the one in your pocket.”

Used to be that old cellphone or Power Mac G4 was supposed to be junk. But junk’s day has come. Retailers have discovered that their recycling programs, which promise an environmentally correct ending for their goods, generate both foot traffic and warm, fuzzy publicity. The problem? Critics maintain that much of the recycling that ends up being done is anything but green—and may also lead to identity theft.

As recently as six years ago, seven out of 10 consumers who bought a new piece of electronic equipment simply “warehoused” their old ones, stashing them in their basements or attics mainly because they knew that throwing them away was dangerous.

Now, however, head for a big box store and you’re likely to find some kind of deal that’ll happily trade yesterday’s digital wonder for a nice new gift card. Walmart’s Electronics Trade-In effort is starting its third year, and “consumer response continues to be strong,” according to a spokesperson. A rep for Staples notes that “we make it easy for our customers to trade in their electronic devices” via its Eco Easy program, which took in 10 million pounds of electronics in 2010.

Such “takeback” programs dole out benefits for retailers and recyclers alike (not to mention technology brands eager to wear the laurels of eco-responsibility). “Trade-ins fuel consumer spending in our stores without us having to get overly promotional,” says a spokesperson for Best Buy.

The word recycling has a nice ring to it. But there are myriad recycling companies, and many ways to dispose of an item. So what’s in store for a used device whose owner has just swapped it for a $49 gift card?

For one, the practice often means refurbishing a machine and selling it on the secondary market, either whole or in component parts—indeed, the electronics afterlife has become a very profitable place.

Online retailer TigerDirect sells reconditioned laptops and hard drives for a fraction of what new ones cost. “I tell all my friends they’ll get more bang for the buck by buying refurbished,” says Lonny Paul, vp of marketing for TigerDirect’s parent company, Systemax. He adds, “There’s a great market in Latin America for used laptops.”

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