Just last month, e-commerce company eBay launched its “eBay Choices" initiative for refurbished products such as phones, laptops, tablets and computer peripherals. Around the same time, Amazon.in started its “quality-assured refurbished smartphones" section.

Clearly, it’s a massive opportunity waiting to be tapped. “By 2020, e-commerce in India will be $115 billion (around 7.6 trillion) and if we assume just a 10-15% return rate, it means there will be over $12-17 billion worth of products that will be returned by consumers every year," says Pankaj Ukey, director, seller services, eBay India.

Such products, candidates for the refurbished tag, can be cleaned, their data removed, repaired if needed, retested, and then repackaged for sale. “Refurbished units are units that were returned to us because of software or hardware issues faced by customers. These are repaired and resold with a minimum six-month warranty," says Manu Jain, head of India operations, Xiaomi.

“All hardware repairs, regardless of how minor, will lead to a phone being labelled as refurbished," says Saptarshi Nath, co-founder, Overcart.

Globally, many phone makers have refurbished product programmes. In India, phone makers are not selling refurbished phones directly to customers; they are relying on e-commerce partners such as Gobol, Overcart, Amazon and eBay. “Our consumer insights give us enough reason to believe that there is a market in India for quality-assured, brand-refurbished smartphones at value prices," says Noor Patel, director of category management, media, Amazon India. Complete with warranty.

A refurbished device could be a new phone that is found to have some fault during manufacturing—it is immediately repaired, repackaged and put on sale. “Any phone that had faced some minor defect during the initial product run, and has subsequently been repaired, would be termed a refurbished phone," says Rohan Gupta, chief operating officer of Attero Recycling Pvt. Ltd, owners of Gobol. What’s more, phone makers are increasingly replacing customers’ faulty phones with fresh units. The devices taken back are repaired and resold. Then, of course, there are the used phones that customers exchange for new ones—these devices may not need repair, but are still tested and recertified.

Saving money, and more

The biggest advantage of a refurbished phone is that it is cheaper and offers the same premium experience. There is no hard-and-fast rule about the discount percentage. For example, a refurbished avatar of Google Nexus 6 (32 GB) is available for 25,990 on Overcart; it costs 44,000 on the Google Play Store. Similarly, a refurbished OnePlus One (64 GB) is priced at 15,999 on eBay.in, while its official cost is 21,998.

“Cost-conscious buyers are looking to upgrade from entry-level smartphones to high-end and branded smartphones," says Vikas Agarwal, general manager (India), OnePlus. And you’ll have less hesitation in discarding a refurbished gadget if you have your heart set on buying another phone 12 months later.

For a buyer, it is the testing and almost new condition that differentiates a refurbished phone from just any other repaired phone. A used phone without the refurbished tag is basically sold after removing the previous owner’s data; it may have faults.

In contrast, Overcart runs a 72-point check on every phone to ensure quality and performance. “Every device will pass through a certification process to ensure that they meet our criteria prior to sale," says Nath. “We will ensure that all refurbished products being listed on the platform have been scanned for defects and functioning issues and will also be certified and tested before being listed," says Ukey.

Buyers do need reassurance. “We believe that for any consumer to believe in the authenticity of the products being offered, especially at such low prices, it is important to back them with an assured warranty," says Gupta.

So refurbished phones come with a warranty if you buy them from recognized stores. “All the brand-refurbished smartphones are ‘Fulfilled’ by Amazon (the e-commerce company, not the seller, stores, packs and dispatches refurbished products) and backed by an A-to-Z guarantee and premium guaranteed deliveries apply to these products," says Patel. “The refurbishers will assist buyers in providing three-, six- or 12-month manufacturer or seller warranty, during which a buyer can reach the certified partner’s service centres across India," says Ukey.

As long as you get a bill and warranty, your phone is in no way inferior to your friend’s brand new phone. “Xiaomi provides after-sales service warranty support for such devices," says Jain. OnePlus and Samsung, among others, too extend full support.

Buy smart

The performance of refurbished phones in the real world will depend on the quality of repair. How can you potentially identify which phone to buy? Typically, phones that you should be wary of will not come with a warranty—and you won’t know what was wrong with them. Agarwal warns, “To control costs, sellers typically refurbish on their own and may compromise on product quality."

If the phone has been repaired by a company’s authorized service partner, you can get the details on what has been set right—they have logs based on the phone’s serial number.

Of course, any gadget can suffer a freak failure, even a brand new phone. If you buy a refurbished phone with a warranty, there is no reason why it should not work as well as a new phone. We tested some, and it is hard to tell them apart from a phone that was new at the time of purchase.

If you’re still not sure, catch hold of a friend and subject him to a spot-the-difference test—if the recertification has been done well, chances are he won’t be able to come up with anything.

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