THE BLOG

Fast Cash for Your Old Cell Phone

05/02/2014 04:54 pm ET | Updated Jul 01, 2014

Electronic waste is one of the fastest growing problems in the world. According to the Solving the e-Waste Problem Initiative (StEP), 123,000 metric tons of electronic devices become e-waste every year, with Europe, the United States and China being the top polluters. E-Waste is still more likely to be tossed into a landfill or thrown away than it is to be reused or recycled. Most of the discarded devices end up in China or India to be dismantled for the copper, silver, gold and other valuables that can be recovered. There children are at risk to exposure of arsenic, mercury, aluminum and other hazardous chemicals.

The problem is massive and growing, but the solution is already here -- at hand -- with a wad of cash in it. Companies like ecoATM, Liquidity Services, Electronic Recyclers International Inc. and Appliance Recycling Centers of America all make it easy for Americans to properly dispose of your old cell phone, tablet, computer or refrigerator, and will dismantle the products in a responsible way. ecoATM will take your device, resell it and reward you with money instantly from the convenience of a kiosk at your local mall.

Over 2 million electronic devices have already gone through the ecoATM channels.

To learn more, I interviewed ecoATM CEO Maria Stipp on April 24, 2014.

Natalie Pace: Tell me how you first discovered ecoATM.

Maria Stipp: Some years back, ecoATM won the Next Big Idea Contest [at Outerwall]. Our company ended up investing, and we learned more about the opportunity of providing a convenient and simple way for people to resell and recycle their devices. We acquired ecoATM in July of 2013.

NP: How big is the marketplace? Everyone seems to have a cell phone - even teens.

MS: Sixty percent of Americans have devices, and of those people 40 percent or more have more than one that is idle in their home. Even in my own home, with two seven-year-olds, we have two iPads and two phones sitting on my desk waiting to go back to an ecoATM.

NP: You just hit a company milestone, didn't you?

MS: We just collected our two millionth device, which is a huge accomplishment for us. We continue to grow rapidly.

NP: You did this with just 900 kiosks, right?

MS: Just over 900.

NP: Which areas of the United States are you in right now?

MS: Most of our footprint is at regional malls across the country. If you go to ecoATM.com, you can search and find one that is fairly close to you. We're in 42 states currently and growing.

NP: Outerwall, the parent company of ecoATM, has Coinstar and Redbox kiosks everywhere. Will there now be an ecoATM alongside them?

MS: Outerwall has over 44,000 Redbox machines in the U.S. If you think about that, that's more than Starbucks and McDonalds combined. If [ecoATM] stands for the same basic principle, in terms of being convenient to the customer, providing an extremely simple experience and ultimately providing the best value to the consumer, we believe those principles will hold true and make us successful with ecoATM, also.

NP: Who is on the buying end of this transaction? I read that 75 percent of the phones are getting a second life.

MS: We see phones sometimes two and three times. We're proud of that. It allows that electronic not to end up in a landfill. The backside of the business model is essentially selling to aggregators, either domestic or international, that are both R2 and ISO certified, so that we can stand to our brand promise of being recycle-friendly. We audit our business on a regular basis to make sure of that.

NP: What about the 25 percent that do not get resold? Are you able to monetize that as well? According to DoSomething.org, "For every 1 million cell phones that are recycled, 35,274 lbs of copper, 772 lbs of silver, 75 lbs of gold, and 33 lbs of palladium can be recovered."

MS: There are certain devices that don't have any value [for the consumer]. We have some ability to monetize that as well.

NP: I was intrigued and also pleased to see the ecoATM focus on law enforcement. You go to great lengths to make sure that thieves are not stealing cell phones and dumping them at an ecoATM for quick cash, don't you?

MS: Yes. It's a big part of how we make decisions. We've put a lot of technology on the kiosk. There's a human on the other end of every transaction. There are cameras on the machine so that we can see the transaction in real time. We check driver's licenses. Facial recognition. We also take a thumbprint. We have a driver's license reader that captures information. Then we also make sure that we report all of that information both nationally and at a local level.

NP: Does that ever put off the person who just wants to recycle their phone, without giving up all of that personal information?

MS: People have told us that they feel better about the transaction. They feel safe. They think we care and that we're protecting them. That's exactly what we're doing. We want to be the advocate for the consumer, and we want to allow the consumer the opportunity to find a home for their idle devices in the marketplace. If you think about it, we have a huge opportunity. When the company was originally founded, the recycle rate was only 3 percent.

NP: What percentage of electronic devices are recycled or resold today?

MS: The recycle rates have increased to 16 percent, which is great news. It is predicted that by 2018, over 40 percent of all mobile devices will be recycled. We want to be a part of that growth.

NP: How much money can you get for your iPhone or Samsung Galaxy? Is it really worth it, or is this the same person who collects bottles and cans?

MS: We believe that it is wildly worth it. If you take a look at some of our prices, you may actually find yourself at our kiosk sooner rather than later. We've got prices of two and sometimes three hundred dollars for a device, if it's in good shape. We have to make sure that we're delivering an experience that creates value for the customer and that means a very good price for their device.

NP: Why would someone recycle with ecoATM instead of just doing a trade-in at Apple or Samsung (or ...)?

MS: Typically speaking, you can receive an in-store credit, or you can apply the value of that device to a new purchase. I can tell you from personal experience that when I have devices in my home that need to be recycled, I'm interested in instant value. And I'm not as interested in trading them in to buy something else.

NP: Does ecoATM give me more dough than I would receive for a trade-in?

MS: That is exactly true. [People prefer] the no-haggle, global pricing aspect of our business model.

NP: What lies at the heart of the ecoATM business model?

MS: We want to be a resource for consumers. I encourage your audience to try our solution. Honestly, I've experienced every other kind of solution to be responsible and try to get value for my "stuff." I would put our experience and the value that we provide to consumers over any other solution.

About ecoATM
Based in San Diego, California, ecoATM Inc. is the first and only company to create an automated self-serve kiosk system that uses patented, advanced machine vision, electronic diagnostics, and artificial intelligence to evaluate and pay cash for old and unused electronics. ecoATM is a member of the Outerwall, Inc. family.