Where Your Gadgets Go to Die

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.” Still, only a small percentage, relatively speaking, of received machines/computers can be refurbished, says a spokesperson for Dell, which also has a recycle program. That 1992 IBM ThinkPad with the 120MB drive? It’s heading for the scrapper. More importantly, secondary markets can be murky places. In fact, buyers can range from identity thieves to shifty processors who simply pry off what they want and dump the rest in a landfill. “There are recyclers I know that are discarding their old computers to Third World countries. [The devices] end up in China and India where people try to melt off the gold and bury the rest in a hole,” says Bob Knowles, CEO of Denver-based recycling company Technology Destruction. Known as an “end-of-life” recycler, Knowles contracts with big companies discarding their machines, charging $50 to annihilate each computer. Demanufacturing is complicated and dangerous (see box), so Knowles’ margin comes from his fee while the value of the precious metals he recovers allows him to control costs. (Metals, including nickel, indium, platinum and gold, are recovered via shredding or melting down.) Knowles’ company, and the relative handful of demanufacturing firms like it, throws nothing away. Everything—even the toxic stuff—can be sold as a commodity. Anything less than computer destruction, Knowles says, is dangerous to people and planet alike. Brian Brundage, CEO of demanufacturing firm Intercon Solutions, echoes Knowles’ concern: “The public isn’t aware of where these machines are going. I’d say 30 percent ends up in landfills—and that’s not recycling.” He’s not too keen on the reuse of memory components either. “All that the manufacturers are telling you is that it’s going to be recycled—but they could pull out the hard drive and sell it to someone who’s going to sell it on eBay,” he says. “It’s a little scary.” Knowles’ other complaint—in some ways just as serious—is that while recyclers claim to “wipe” the hard drives of the old computers they buy, there really is no such thing as cleaning personal data off a hard drive short of completely destroying it. “Forensically, it’s not possible,” he says. “You can’t scrub them.” According to an EPA white paper released this past summer, “While accurate data on the amount of e-waste being exported from the U.S. are not available, the federal government is concerned that these exports may be mismanaged abroad.” While the EPA has two certification programs to encourage best practices in recycling, sign-up is voluntary and its guidelines do not address identity theft. What do the brands and resellers have to say about all this? Best Buy concedes that its trade-ins are often resold, but “in all cases, these devices find another life in a responsible way,” says the company spokesperson. “We all have that concern—but we all have a certain level of personal responsibility,” Paul adds. “If you need to buy a new wallet, would you leave everything in your old wallet?” Probably not, but Brundage maintains that there’s only so much a member of the general public can really do. “For everyone who says he can deformat a drive, you’ll find others who can get the data off,” he says. And here is where the issue comes to an ironic halt—for now, anyway. Asked what individual consumers looking to offload an old computer should do, Knowles has one answer. “Take your hard drive out,” he says, “and don’t throw it away.” Artwork: Bryan Christie

Performance Marketing

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?

Robert Klara

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Robert Klara