Years ago, when you bought a new phone, the old one usually met one of three fates: it stayed in a drawer, went to a family member, or was sold in the secondhand market.

Today, companies and retailers themselves have entered the process. They offer you credit or a discount on a new device in exchange for your old one, after which the device enters another cycle that may include inspection, refurbishment, resale, or recycling.

But why has a company that wants to sell you a new device also become interested in buying the old one?

The reason goes beyond disposing of electronic waste. Trade-in changes the economics of the device itself: instead of the commercial relationship ending after the first sale, the device can begin a second economic cycle.

The Phone Is No Longer a Product That Ends with the Sale

The traditional consumption model follows a straight line:

We make → sell → use → dispose.

In the Circular Economy model, however, companies try to keep the product and its components within the economy for longer through reuse, repair, refurbishment, and resale.

This is particularly important for phones, because a device that is no longer suitable for its first owner may still have value for someone else.

GSMA, the global organization representing the mobile communications industry, notes that global new-phone sales fell by 15% between 2021 and 2023, while sales of used and refurbished phones rose by 15% during the same period. The global phone-upgrade cycle has also reached approximately 3.5 years on average.

These shifts create a clear incentive for companies: if consumers are keeping their devices longer and the secondary market is growing, why let the full value of an old device move to the person-to-person resale market?

Trade-In Does Not Just Buy the Old Device—it Helps Sell the New One

Imagine that your current phone is still worth an amount that can be used when you upgrade. Suddenly, you are no longer comparing the full price of the new phone with the money in your account, because you already own an old asset that can fund part of the purchase.

This is where trade-in’s first function appears: reducing the effective cost the customer feels when upgrading.

Apple, for example, allows customers in Saudi Arabia to trade in their current device and receive a value that can be used to purchase a new product or as a gift card, while devices that are not eligible for credit can be handed in for free recycling.

Jarir Bookstore applies a similar idea locally: customers can hand in a phone, smartwatch, laptop, tablet, or other device in exchange for value that can be used as a discount or purchase voucher.

Economically, the retailer is not merely providing a way to dispose of an old device. Trade-in can also help complete the new sale and retain the customer within the store.

Instead of selling the phone themselves and taking the money to any other store, customers have the value of their old phone applied directly to their next purchase.

The Device Itself Can Reenter the Market

But where does the phone go after it is collected?

Not every device follows the same path. Depending on its condition and the trade-in program, it may be reused, refurbished, or recycled.

Here, it is important to distinguish between used and refurbished. A used phone may simply move from one owner to another, while a refurbished device typically undergoes inspection and preparation before being offered for sale again according to the standards of the provider.

This creates a market between new phones and the traditional secondhand market: a device that has been used before but is sold through an organized commercial channel that may provide the buyer with inspection, a warranty, or clearer information about its condition.

GSMA estimates that the global market for refurbished phones and device-repair services represents an opportunity worth more than $150 billion by 2027.

Thus, a phone can create economic value across more than one stage: an initial sale to a consumer seeking the latest device, followed by a transfer to another consumer looking for a lower price; once its usable life is over, some of its materials can be recovered through recycling.

But Why Not Sell My Device Myself?

This is where the trade-off appears.

Direct person-to-person sales may give the device owner a better price in some cases, because there is no commercial entity that needs to cover the costs of inspection, refurbishment, resale, warranties, and risk.

The trade-off, however, is convenience and trust.

Customers who use trade-in typically avoid searching for a buyer, negotiating, posting advertisements, and dealing with the risks of selling to a stranger. On the other hand, a buyer who purchases a refurbished device from a trusted provider may receive a higher level of inspection and warranty coverage than they would when buying a device with an unknown history from another individual.

This point matters because the biggest obstacle to the growth of the refurbished market is not price alone, but trust.

In a recent global GSMA survey, 92% of participants said that quality assurance was important or very important when buying a refurbished phone, while 86% expressed concern that a refurbished phone would fail sooner than a new device.

The economic opportunity is therefore there, but unlocking it depends on something simple and difficult at the same time: buyers must trust what words such as “excellent” or “refurbished” mean, as well as the condition of the battery and screen and the warranty they receive.

What Is Changing in the Saudi Market?

The presence of trade-in services offered by companies and retailers operating in the Kingdom means that the old-device cycle has already begun to become part of the new-device purchasing experience.

This opens up a market broader than simply trading used phones.

It includes device valuation, inspection, repair, phone refurbishment, used-inventory management, warranties, resale, and then recycling for devices that are no longer economically viable to return to the market.

In other words, a device that might once have remained in a household drawer for years can become an asset with residual value, meaning the value a product retains after a period of use.

This value can even affect the initial purchase decision. In the future, consumers may not ask only: How much does this phone cost? They may also ask: How much of its value will it retain when I want to trade it in?

The device’s ability to retain its value thus becomes part of its true economic cost to the consumer.

The Benefit Is Not Merely Commercial

Extending a phone’s lifespan has another important dimension.

According to GSMA, around 70% to 90% of the typical smartphone’s lifecycle emissions come from materials and manufacturing. Extending the life of devices and reusing them therefore reduces the need to manufacture a new device for every user at the same rate.

But it would be wrong to reduce trade-in to sustainability alone.

Sustainability here intersects with a clear economic incentive: consumers lower the cost of upgrading, second buyers get a device at a lower price, companies enter an additional market for services and refurbished devices, and the product remains in use for longer.

Who Owns the Device’s Lifecycle?

As the recommerce market matures, competition in electronics may expand beyond simply asking: who sells the new phone at the best price?

Competition may extend to questions such as: who offers the best valuation for the old device? Who makes trade-in easiest? Who can refurbish the device efficiently? And who can convince consumers that the refurbished phone they are buying is reliable?

This is where the business model itself changes.

In a linear economy, the device’s value to the retailer ends when the sale is completed. In a circular economy, the end of the first customer’s use may become the beginning of a new economic transaction.

That is why retailers want your old phone.

Not because it has become worthless, but because they have realized that it still holds value that has yet to be extracted.