Trade-in process at glance
Trade-in refers to the situation when retailers buy products back from customers. This normally happens in electronics industry or in businesses with short product life-cycle (trendy products) but the long-time usage and can be reused many times. These buyback products can be which the customer purchased from this business (this store or another store in the system) or can be the one which the customer purchased from another business. For example, many phone sellers provide the service called Buy 1 exchange 1 to prompt customers to bring their own old phones to stores and get a new phone with the small price differences. Another scenario is CD game sellers who stimulate customers to return their purchased CD games and receive Gift Card, money back or new CD games. Or in pets store, in addition to selling pets directly to customers, many retailers buy back puppies, kittens, etc. and will sell them to other customers.
So whatever scenario is, a suitable POS system can help a lot with easily handling the trade-in process. Let’s discover what the steps are and get well-prepared for that.
1. Set up products which are allowed to buy back
No matter you’re selling the products you will buy back or not, it’s necessary to set up the rule of calculating prices when buyback and define the possible products to buy back from customers. As a retailer, you should notice that, the final purpose of buyback is still to resell. You can furnish the items to resell them with the higher price or you can get the usable components in the device to resell them separately. For phones or laptops, remember to check carefully for their operating systems or hardware components. As sometimes, these parts look usable but in fact, they are too outdated which the brand suppliers no longer support that. Failing to do so will lead to the difficulties in reselling products as well as providing warranty to customers.
2. Buy back from customers and exchange new items
Staff can easily switch between 2 modes: Checkout and Buy Back to calculate the price difference if customers want to exchange for a new item. In case, the customer doesn’t want for an exchange, you merely click Buy back to calculate the money needed to pay back to customers.
If buyback products are not available in catalogue, staff can still easily create custom-product in POS to buy these items and take note efficiently.
3. Furnish or recycle products when buying back
When buying back from customers, many retailers need to furnish or recycle them so they might need to charge the fee of furnishing and deduct this fee when buyback. Plus, they want to manage all need-to-be-furnished products in a separate area or inventory to easily control them later. It should be better if POS can serve this function as well.
Besides, furnishing can be a complex process when technician needs to check the quality of the buyback items thoroughly, determine which component should be replaced and calculate the fee and time of replacing the components. After furnishing the items, they need to determine the possible cost of products and transfer these items to sales department.
Regarding to recycling one buyback item, the technician can disintegrate all components in one PC, check the components can be resold and the possible price, the life-cycle and warranty of these components in the market. Moreover, retailers need to control the cost-efficiency when buyback to recycle and provide warranty to these items later.
4. Allow customer to get money back or Gift Card
To promote customers to get back more and more while controlling the cashflow efficiently, retailers prefer to give back customers with Gift Card or Store Credit instead of money. On the contrary, customers definitely prefer to get money back. So how can we harmonize the benefits of retailers and customers here?
There is one way we apply for trade-in process in client’s business here:
- If customer wants to get money back by cash/credit card/etc., they only can get x% of the returned value.
- If customer agrees to get money back by Gift Card or Store Credit, they can get 100% of the returned value.
With our experiences as business consultants, we find that, buyback can be one of the ideal ways to retain and keep a long relationship with customers as long as the process is managed efficiently. In the next articles, we would share with you more about how to gain customer loyalty. Stay tuned.