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Why U.S. consumers are reluctant to buy refurbished phones

The U.S. refurbished mobile phone market lags behind compared to the UK and Europe. Consumers often assume buying brand-new is the best choice, but buying refurbished can help save you money and reduce your environmental impact. recently sat down with Steve Athwal from The Big Phone Store, a UK-based company selling refurbished devices, to discuss the benefits of buying refurbished, why consumers are purchasing next-to-new products now more than ever and the potential for refurbished mobile phones to become a mass market item.

What is a refurbished phone?

“We refer to refurbished phones as an umbrella term,” explained Athwal. “What that does is captures all different types of phones which are non-new.”

On one end of the spectrum, you have phones that were purchased from a major retailer and then returned without being used. These are basically brand new phones that have been taken out of the box once or twice.

On the other end are phones that were used by someone who got an upgrade, sold the old phone to someone else, that person sells the phone again and so on and so forth.

The way Athwal sees it, there are four types of consumers in the refurbished phone market.

The first type is consumers who want the latest device but can’t afford it. This is the core customer base for refurbished phones. The second type is consumers “that can afford it, but they’re becoming more and more aware about the environment and the impacts of buying brand new, the resources, the mining that goes into it,” said Athwal.

The third type is consumers who have never considered refurbished and its benefits. The fourth and final type is consumers who “bought a refurbished phone in the past, they’ve had a bad experience, and ‘it’s never again, I’m only going to stick to brand new.’”

Why buy refurbished?

A few years back, Athwal had a market survey conducted by a leading market research company. The question posed was simple: If you were to buy a refurbished phone, what factors would go into that decision?

He expected most of the people surveyed to say they’d buy refurbished to save money. Instead, the majority of consumers who took part in the survey said they’d buy refurbished because it’s better for the environment than buying new.

Still, a nagging question remained. If people who have never bought refurbished make up the biggest portion of the mobile phone market, how are those consumers going to adapt to buying refurbished?

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From thrifty niche to mass market product

As the cost of living rises, a growing number of people are buying refurbished phones.

Athwal explained that in the UK, “everything’s become expensive. the price of gas, the price of electricity, absolutely everything. So, consumers are looking at how they can reduce costs.”

U.S. consumers are faced with these same issues in the wake of the COVID pandemic and the ongoing situation in Ukraine.

The growing number of ‘SIM-only’ mobile phone plans has also contributed to more consumers buying refurbished devices. These plans do not include an actual device- just the SIM card- so consumers have to look elsewhere to buy a mobile phone. There are limited brand-new options in this scenario, hence the need to buy a refurbished phone.

Additionally, customer service is essential in convincing the reluctant consumer to buy refurbished. Athwal said The Big Phone Store tries to “go above and beyond” to ensure their customers- especially first-time buyers- are blown away by the product they receive.

“There’s nothing better than word of mouth,” he said.

Is refurbished the next big thing?

Recently, Athwal was talking with one of his American employees who pointed out that all her friends and family in the U.S. have iPhones. There’s a big sense of brand loyalty to Apple because it’s an American company. Athwal said this is one of the reasons why the U.S. has been slow to adopt the refurbished phone product. The UK doesn’t have the same sense of brand loyalty because there is no UK manufactuer of mobile devices.

Apple has started selling refurbished products, too, “not because they want to, it’s because they’re seeing the shift in people moving to refurbished and they don’t want to miss out on that,” explained Athwal.

Ultimately, the consumer will decide whether or not companies like The Big Phone Store can make the leap into the U.S. market.

Athwal said if he were ever to expand the business to the U.S., he’d like to have a physical store location as he does in the UK.

“We came up with this little game called ‘Spot the Difference,'” said Athwal. “You come into the reception [area], you’re going to be shown two devices. See if you can work out which one’s a brand new one and which one’s a refurbished one.”

Customers can rarely tell the two devices apart, and that’s when Athwal knows he’s won them over.