Following up on plans to increase iPhones sales at its retail stores, today Apple rolled out an iPhone trade-in program with strict conditions aimed at retaining existing iPhone owners and not handing out cash. The program has significant limitations that put it in a different category from trade-in programs offered by Gazelle, Amazon and several other companies for many years. The other programs follow a simple supply and demand model, offering cash or Amazon.com credit for virtually any iPhone (Gazelle also accepts iPads, iPods and Macs). Under these program, an iPhone’s value varies based on the model and condition, and also on the new model cycle. That is, the current iPhone 5 is more valuable now than after the new model is introduced (September 20th?). In contrast, Apple’s trade-in program should more accurately be described as an “owner retention” program. It only offers value on an Apple Store Gift Card. It turn, the card is only redeemable for the purchase of a new, activated iPhone, although the phone can be an unlocked model. In addition, the customer’s carrier contract can be in “upgrade eligible” status or not, although the status affects the trade-in value. As for value, Gazelle is now offering $330 and Amazon $389 for a flawless iPhone 5 16 Gb. Apple reportedly is offering up to $280 for the same model. Earlier this year Apple CEO Tim Cook told a group of retail store leaders that he wanted to increase the total percentage of iPhones that are sold within the stores. He mentioned a trade-in program and price-matching as two possible methods of reaching that goal. The recent distribution of small flashlights and small cloth bags to retail store employees is apparently related to the new trade-in program. The flashlights, attached to a carabinier, will be used to inspect an iPhone for damage. The purpose of the bag isn’t known. At the time of this posting, the trade-in program isn’t mentioned on any of Apple’s retail store Web pages.
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