Under a Telstra lease plan If the phone is in good condition, there are no extra charges when returned. If it is scratched or damaged, the business has to pay $229 (minor damage), or $499 (if damaged beyond repair).
However, Telstra has stopped selling phones on lease since 25 June 2019, so this major source of phones for refurbishment will eventually peter out. Telstra now offers a straight purchase plan not subsidised by voice and data plans.
So, at the end of the lease, the Telco or leasing company has a worthless phone unless it can be resold, refurbished or recycled (in order of value).
What is refurbished?
Only Apple operates a genuine refurbished phone market. Apple guarantees you receive a “like new” device with genuine Apple replacement parts (as needed) that has been thoroughly cleaned and inspected. Refurbished iOS devices come with a new battery and outer shell. Every device comes with all accessories, cables and operating systems.
All Apple Certified Refurbished products are packaged in a brand-new white box and will be sent to you with free shipping and returns. They have a one-year limited warranty with the option of getting additional coverage by purchasing AppleCare.
So, it’s safe, but you will pay a lot more – Apple refurbished items are typically only 15% off the new price.
Otherwise, the term refurbished is much abused.
GadgetGuy says unless at a minimum the battery has a couple of years life left (250+ cycles) in it then you are buying a ticking timebomb (see battery information below).
Many refurbishers will spruke comprehensive checklists and Australian warranty (that they provide and may not honour). Some suggest that international phones have new Australian firmware loaded (impossible unless you are the maker and the modem supports Aussie LTE bands). In reality, most just factory reset the phone, clean it up, fit a soft plastic screen protector (to hide scratches), shrink wrap it, and that is about it.
What should you pay for a second-hand or refurbished phone? What is the market value?
As a guide Telcos say that a phone loses value at about 3% a month so after 24/36 months it is worth 28%/-8% of its original value. Frankly, a phone over three years old is worthless – only the price you are willing to pay.
And you need to add or subtract depending on the condition. A phone that has always been in a case and is pristine may be worth say $50 more.
Why is a refurbished or second-hand phone over three years old worthless?
In two words, ‘battery life’. A rechargeable lithium-ion battery has a theoretical maximum recharge cycle of between 300-500 times. Battery capacity (the ability to hold a charge) decreases to about 70% capacity after 250 cycles (typical annual use) and then depending on how it has been treated it may drop to 50% by the end of year two and as low as 0% at the end of year three.
Don’t be fooled – the percentage battery indicator on most phones screens is based on the percentage of charge, e.g. if it only holds 50% or the rated charge and the indicator shows 75%, then it has 37.5% capacity left. That is why phone makers will not change the indicator to show battery health (its remaining capacity).
In the iOS iPhone/iPad world, the free Coconutbattery app will reveal battery health and cycle count. Remember, the cycle count needs to be as low as possible – the maximum is about 500 cycles.
In the Android world, the free Accubattery also shows percentage battery health. For example, my almost one-year-old Samsung Note9 is currently at 90% battery health, so its 4000mAh capacity is now closer to 3600mAh. I use Qi charging most of the time that is kinder than USB charging.
A battery replacement is not easy – it requires screen removal (using a heat gun), and the battery replaced. If not done properly it can ruin any IP ratings or damage the screen. Expect to pay about $100 for most professional battery replacements.