How to cash in your old cell phone

December 7, 2007: 12:13 AM ET

By Michal Lev-Ram

Shiny new cell phones might make for great stocking stuffers, but for every new mobile device purchased there's an old phone that needs to be recycled. If you're prone to hiding last year's model in a desk drawer or, even worse, throwing it in the trash (a major environmental no-no), think again. This holiday season, you might consider swapping it for some cash.

You won't make much, but companies like Flipswap and CellForCash.com will actually pay you for your old phone, which they then resell. Torrance, Calif.-based Flipswap offers its service to consumers on its site but also sells its software -- sort of like a Kelley Blue Book for phones -- to wireless distributors like Parrot Cellular and online phone retailer Wirefly. Flipswap's proprietary, real-time pricing algorithms take into account your phone's make and model, condition and market demand. A one-year-old Motorola Q from Verizon Wireless will fetch $54.50, for example, while the average payout for an old device is $30, says Flipswap CEO Sohrob Farudi. Then again, the company has also shelled out upwards of $300 for an "old" iPhone (which Farudi now uses).

Flipswap, which was launched in 2004, is already profitable, according to Farudi. He says more than 2,000 cell phones were traded in through Flipswap on Black Friday -- the post-Thanksgiving start of the holiday shopping season. But it's all pocket change compared to the more than 100 million phones discarded each year in the United States alone. To increase its reach, Farudi says his company is in talks with two of the major carriers.

December is the busiest season for cell phone sales: According to mobile research firm M:Metrics, an estimated 12 percent of U.S. consumers will buy new phones -- a 40 percent spike above the monthly average rate. And this year, Farudi expects business to be especially good.

"I think we're going to see a lot of activity this month," says Farudi. "And that's partly due to the iPhone."

It won't be just new iPhones that are taking the place of older devices. Other new touchscreen phones, such as Verizon Wireless' Venus and Voyager, could mean more business for companies like Flipswap. Ocala, Florida-based CellForCash.com also takes in old cell phone in exchange for cash - their average payout is about $25, according to spokeswoman Linda Zimmerman.

And if you're feeling generous, both companies also let people donate their cell phones to a variety of charities. Either way, it's better than letting them non-biodegrade in the depth of your desk drawer.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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