Like a lot of people, I greeted the news that Apple was on the verge of scheduling a press conference for the inevitable third-gen model by scouring the web to discover who would pay me the most for my gently used first-generation iPad.
After poking around a bit, I selected NextWorth, which had a good reputation on various sites (including ours) and was offering $170 for my WiFi 16GB iPad, a solid $30 higher than anyone else. I printed the prepaid UPS label and shipped it off, waiting for the deposit to my PayPal account on the other side.
So imagine my surprise when I received an e-mail two weeks later offering just $70 — effectively the value of the battery and internal electronics alone. Needless to say, I was pissed off. As it turns out, I had good reason to be. Quite ironically, I was getting shorted on my iPad because of a software glitch. As were many others like me.
All of this would be merely an odd experience, were it not for the fact that this wasn’t an isolated incident. According to NextWorth Chief Marketing Officer Jeff Trachsel, a number of NextWorth clients (“it was in the tens, not hundreds,” he told me) were sent similarly low-ball offers owing to an error in the company’s computer-based price calculator. Like me, they later had their offers adjusted back up.
The way the system is supposed to work is that people selling their electronics use a simple checklist system to estimate the value of their devices, then NextWorth inspectors run the same checklist. If they disagree with the assessment of condition by the user, they note any discrepancies and reduce the offered price accordingly. Unfortunately, the system was significantly exacerbating the impact of such discrepancies.
“We were, in essence double-counting for some discrepancies,” meaning that two value deductions that should have accounted for a total of $10 ended up at $20. Presumably, the adjusted offer to me should have been $120, which I would have been annoyed by but probably would have accepted.
According to Trachsel, the error showed up during late March and was discovered earlier this week (I didn’t request to speak with NextWorth about this story until after I received my payment, so I assume my being a blogger didn’t influence the remedy). When the error was discovered, all affected users were either offered the original value or “reached an agreeable position” with customer service, he said. NextWorth’s system has now been reconfigured so that if a trade-in’s value is rated at less than 50% of the original offer (mine was reduced to about 40%), it will be flagged and carefully checked by another person, rather than sending an automated offer, as occurs with typical orders.
What’s most fascinating to me about this situation is that, on some level, it’s merely an extreme case of an inevitable problem with the online electronics trade-in programs that have proliferated over the last five years: people have an over-riding incentive to overvalue their stuff, and the companies making the purchase have an absolute incentive to undervalue what they receive. As Trachsel acknowledged, it’s an industry-wide problem.
“All of us in this space struggle with this — look at anybody’s Facebook page” for angry feedback from clients, he said (I’ll note that the feedback on pissedcustomer.com for similar service Gazelle is about as furious as anything I’ve seen or thought toward NextWorth). It’s very hard to know, as the owner of an iPad, if a few nicks constitutes a deep scratch or not. There is just a fundamental mismatch of perception between seller and buyer — Trachsel said no more than half of all submissions to NextWorth see a discrepancy in value, but even 10% would be a lot. And that’s not to mention that people packing their iPads to send them in are likely doing so for the first time and may damage their devices in transit without realizing it.
Which is one reason his company is increasingly interested in making use of its other method for collecting used electronics — physical retail stores like Target, in which NextWorth has set up an in-person trade-in program. You walk in the door, the inspector makes an assessment, makes an offer, and you can take it or leave it. It’s the way such transactions always worked until a few years ago, and it leads to a lot less conflict.
Which raises one big question — what can be done to show that same kind of transparency online? NextWorth has tried showing photographic evidence of damage to clients, Trachsel said, but many clients refused to believe the pictures they were shown were of their own devices.
“As long as you have two people looking in different locations, there’s an inherent opportunity for differences of opinion,” he said.
Two days ago, I was really pissed off at NextWorth. I felt like they were deliberately sending me a low offer so they could “compromise” to a fairer but still inadequate price. Now that it’s settled, I’m ambivalent about the entire process. What’s clear is that this is a valuable service, both for sellers and buyers of used electronics. But the online submission process on every such site is set up to create conflict. I feel lucky to have gotten through the process unscathed. What have your experiences been?.