VentureBeat

Buyers remorse is common when it comes to buying consumer electronics. Within six months, your beloved gadget may become obsolete. That’s where TechForward comes in with its guaranteed buyback plans that you can purchase at the time you buy your products.

When you buy goods at TigerDirect or CompUSA, you can purchase a plan for something like $20. If you return the product within six months, the store will buy it back from you for 50 percent of the value. If you return it within the first year, you may get only 40 percent of the original value.

Jade Van Doren, chief executive of TechForward in Los Angeles, says the idea is to alleviate the worry about obsolescence and remove barriers to buying. It’s kind of like leasing a car, where you return the car after a certain period of time and then get a replacement. You can wind up spending less money if you know it’s likely that you’re going to upgrade at some point in the near future.

The company is adding more national retailers soon and is thinking about raising a round of money to finance its expansion, Van Doren said. It’s not unlike an extended warranty that protects against damage, but in this case it merely locks in trade-in values for goods such as Apple iPods.

Stephen Baker, an analyst for market researcher NPD Group, says it’s a pretty good way for retailers to create an ongoing relationship with customers at a time when repeat customers are a high priority. So many markets for things like cell phones are saturated and so return customers are the best way to sell new things. Moreover, the retailers can pay back the user in the form of a gift card, which can spur an additional purchase, Baker said.

Competition could emerge from stores or brands that decide to offer their own buyback programs on their own. In a way, eBay is also competition for TechForward, though there are more hassles asscociated with selling your own goods online.

If you want to sell a product back, TechForward sends you a free box with prepaid shipping and packing material. For retailers, it’s not a bad way to keep customers coming back every year to upgrade to something new. Van Doren also pitches the TechForward service as more environmentally responsible, since the returned goods can be recycled.

The company started in 2005 and began offering its services 2.5 years ago for online purchases. Then it added retail locations. Since TigerDirect and CompUSA came on board in September, sales have doubled every month. Roughly nine percent of the TigerDirect customers are opting for the buyback plan.

TechForward splits its fee with the retailer. The company raised money from First Round Capital and New Enterprise Associates in 2007.

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