published Wednesday, July 10th, 2013

Machines that give cash for old cellphones, tablets come to Chattanooga area

The ecoATM allows users to turn in old cellphones and tablets for cash. The San Diego-based business opened two locations in the Chattanooga region in June.
The ecoATM allows users to turn in old cellphones and tablets for cash. The San Diego-based business opened two locations in the Chattanooga region in June.
Photo by Tim Barber.
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HOW IT WORKS

• Put your old cellphone or tablet into an ecoATM

• Verify your identity with a driver's license and fingerprint

• The machine will scan your device and determine its value; you may be asked to plug it in

• The ecoATM will make you an offer

• You can accept or decline

• Accept and the ecoATM keeps your phone or tablet and spits out cash

• Decline and you'll get your phone back

Source: ecoATM

The average consumer goes through a cellphone every 18 months and there are about 326 million mobile devices in the U.S., according to CTIA-The Wireless Association.

Put those two facts together and you'll find a booming market for used, obsolete or one-model-old cellphones and tablets, said Ryan Kuder, the marketing director at ecoATM, a growing business that broke into the Chattanooga region last month.

The San Diego-based company created a kiosk where consumers can trade in old phones or tablets for cash and is blanketing the United States with the ATM-like machines.

"Most people don't know what to do with old phones and they have a low incentive to do anything at all," he said. "We created ecoATM to be easy and convenient and to provide people with a way to recycle their phones."

The company maintains about 600 kiosks in 40 states and recently set up locations in Northgate Mall and the Bradley Square Mall in Cleveland, Tenn. A consumer can earn anywhere from $1 to $250 per device, depending on the model and condition of the gadget, Kuder said.

The process typically takes less than 10 minutes, he added. Once a customer puts a phone into the machine, the ecoATM requests a driver's license and fingerprint. Cameras capture the customer's photo and live operators verify that the customer's image matches the driver's license.

Once the customer's identity is verified, the ecoATM scans the old phone -- sensors determine what type of device it is and what condition it's in. Cracked screens or missing buttons will drive down a phone's value. Newer models will drive it up. Sometimes, the ecoATM will ask the customer to plug a phone in and will run a series of tests to ensure the device works properly.

Then the ecoATM makes an offer -- typically around $30, but possibly as high as $250, and the customer has the option to accept or decline. Accept the deal and the ecoATM will spit out the cash. Decline and the ecoATM returns the phone or tablet.

At least that's how it's supposed to work. Mall employees at Northgate Mall said they haven't seen anyone get through the process yet.

"I've seen several people try to use it," Selina Pamplin said. "I saw someone kick it because they were so mad. They were saying, 'Give me my phone back!'"

Sometimes, fellow mall employee Gloria Clark said, the process seems to get stuck at the identity verification stage.

"We thought it was kind of neat, so we brought an old phone in just to try it, but we couldn't get past the verification," she said. "I knew I wouldn't get much for the phone but I just wanted to see the process. But it wouldn't work."

When she was denied, her daughter's boyfriend tried too, but couldn't get past that step either. Kuder said he was tracking some problems with that particular machine in Northgate and that the company deployed a fix last week that seems to have solved the problem. He said it is fully operational now.

And despite the trouble, Clark said she's still glad the ecoATM asks for a driver's license and fingerprint because she expects that step helps cut down on the number of stolen phones put into the machine.

Kuder said the company sees about five stolen phones in every 10,000 transactions and that usually the stolen phones are flagged and returned to the rightful owner. Often, the ecoATM's photos help police track down the thief, he added.

"If you're a thief, ecoATM is probably the worst place to sell a phone," he said.

The company recycles about 40 percent of old phones for the metal, and about 60 percent of phones and devices are resold to secondary markets like insurers or refurbishing businesses. The company encourages customers to remove each device's SIM card, which often includes personal information, before turning it in.

But, if a device is turned in with a SIM card, none of that personal data is downloaded and the SIM card is shredded, Kuder added.

Founded in 2008, EcoATM now employs 170 people and is aiming to steadily expand across the United States.

"We would love to have an ecoATM accessible within five minutes to 90 percent of the population," he said. "We feel like we've stumbled across a solution to a problem that a lot of people have. We're building ATMs as fast as we can. We're glad we finally got to Chattanooga."

Contact staff writer Shelly Bradbury at sbradbury@timesfreepress.com or 423-757-6525.

about Shelly Bradbury...

Shelly Bradbury covers police and crime in Chattanooga and Hamilton County for the Times Free Press. She's been with the paper since 2012, working first as an intern and then as a business reporter. She is from Houghton, New York, and graduated from Huntington University in Huntington, Indiana, with a bachelor’s degree in journalism and minor in management. Before moving to Tennessee, Shelly previously interned with The Goshen News, The Sandusky Register and The Mint ...

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