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IPhones and Pawn, the Pros and Cons
This guest post was provided by Stevo, one of Bravo’s very own Support Gurus.
Way back in January of 2007, Steve Jobs, the Founder and CEO of Apple, unveiled a new piece of technology and accompanying software that would change the world and the entire tech industry over night. This device was, in typical Apple fashion, called the iPhone. The iPhone put the power of a computer right in the palm of your hand, better than any predecessor cell phone. The iPhone changed the way users browsed the internet, purchased things online, and played video games overnight.
Overnight people went from using mobile devices for making phone calls and sending text messages to doing that PLUS browsing social media, recording videos, online shopping, trading stocks, watching YouTube videos, and the list goes on. In addition to this new user experience, Apple gave the keys to the phone application development to the public, allowing anyone to create any kind of app (plus the ability to make money by selling it). A whole new industry of app developers was born.
Brilliant Apple marketing taught consumers that the iPhone wasn’t just a cell phone, but a way of life. Steve Jobs opened an entire new genre, and with that new genre, new competitors. Eight years after the iPhone’s release, it seems nearly everyone owns a smartphone.
For years, competitors claimed to have the “iPhone Killer” and the very best mobile devices on the market, but the end result was a split in the market between two kinds of smart phones; Androids and iPhones. However, Apple’s excellent marketing convinced consumers that iPhones are exclusive and therefore hold more value, power, and overall public desire than their Android counterparts.
The public’s perception of Apple’s high value is great for the pawn business. Pawnbrokers have seen an influx in iPhones due to their high demand. But Pawnbrokers beware, Apple’s consistent annual new product releases of iPhones and iPads makes older models obsolete. On the plus side, taking in older iPhones and iPads is not a lost cause entirely because of Apple’s constant updates to iOS. These updates allow older models to run efficiently and therefore, retain value.
Apple devices like iPhones and iPads hold their retail value longer than most other electronics. Even after two or three generations of new models, you can still profit from older models. Of course, there is a huge percentage of people who prefer the cheaper options, like Android or Windows, with similar capabilities and an equally powerful user experience. The dozens and dozens of new devices developed and in the marketplace can’t seem to top the same Feeling, Quality, User Experience, and Exclusivity that an Apple device can offer.
One brilliant Apple marketing strategy was giving white headphones to consumers who buy an iPod, iPhone, or iPad. Before Apple launched the dancing silhouette commercials, all headphones were black. By simply wearing the signature white headphones, an Apple user could inform the public that they are a part of the exclusive Apple community.
This dichotomy between Apple and Android users presents a great opportunity for the pawn industry. If a consumer wants a new product that they already plan on spending hundreds on, a pawn shop is the best place to find a great deal (plus, pair that with the fact that the consumer can bring in unwanted items in for cash or to put toward the price of the new item). A person looking to be “in” or the “cool kid” can now do so at a savings. This is a huge reason why pawnshops love taking in Apple products. They hold their value and are highly sought after by consumers.
When it comes to dealing with Apple devices in pawn shops, here is some helpful information. On loans, I’ve found that pawn shops will give a customer 20-25% of that device’s current market value. This pricing tactic accounts for the item losing 15-20% of its value while sitting for months in the warehouse until it falls out of pawn. A big variable of this is pawn term and grace.
On buys, I’ve found that pawn shops will give a customer 25-35% of its current market value. This is because of the liquidity of Apple products.
So what happens if you pay $150 for an iPhone with the expectation of selling it for at least $300, but then find out you can only get $75-100 for it? This issue has happened to countless pawnbrokers and is because of Apple’s iCloud. Apple has provided the iCloud service to all iOS users for free and allows users to save documents, photos, music, video, and app data all on the cloud. However, iCloud also comes with a security feature called the iCloud lock. The iCloud lock completely disables any IPod, IPhone, or IPad that is linked to that user’s account.
This means that if a customer pawns or sells an Apple device and then initiates the iCloud lock, Apple will permanently lock the device from use by anyone else. The device is then worthless to the average consumer and is only sell-able for “parts.”
How can you protect yourself? It is imperative to have the user sign into their Apple account on the device and disable the iCloud lock before surrendering it to you. If you do get stuck with an iCloud locked device, the only way to “unlock” the device is replace the Logic Board (motherboard/mainboard) of the device with a brand new one.
What is the best way to make sure that you can continue to safely take in Apple devices from your customers? The bottom line: Tell your customers that they need to provide proof that the device is not tied to an iCloud account or watch them delete the account off of the device. Also, if the person is going to sell you their iPhone or iPad, require them to backup all their data and perform a factory reset on it in your presence so that you know that all the steps were completed properly in order to achieve optimal resale value. Below you will find directions on how to remove the iCloud account, backup data, and perform a factory reset without using iTunes.
Removing the Existing iCloud Account from iOS
First you’ll need to remove the existing iCloud account that is in use on the iOS device:
- Open the Settings app and go to “iCloud”
- Scroll down under all the settings to find “Delete Account” (or “Sign Out”) and tap on that
- Confirm the removal of the iCloud account from the device by tapping on “Delete” or “Sign Out”
Note that the newest version of iOS uses “Sign Out” in the iCloud settings panel, whereas the immediately prior versions use “Delete Account” – the effect is identical, it’s just a change of wording. Both will log out of the iCloud ID account on the iPhone or iPad.
Restore to Factory Settings
- Return to the main Settings screen by tapping the Settings menu in the top left of the screen
- Scroll down to the General menu and tap it
- Scroll all the way to the bottom and tap the Reset menu
- On this screen, you’ll be presented with a number of reset options, ranging from just resetting the IOS Device’s settings to resetting its dictionary or home screen layout. There’s nothing specifically labeled “factory reset”; the option you want is Erase All Content and Settings. Tap that
- If you have a passcode set on your phone, you’ll be prompted to enter it here. If you don’t have one (even though you should!), skip to the next step
- A warning pops up to make sure you understand that if you proceed you’ll be erasing all music, other media, data, and settings. If that’s not what you want to do, tap Cancel. Otherwise, tap Erase to continue
- It generally takes a minute or two to delete everything from the iPhone, but when the process is done, you’ll have a brand-new, pristine iPhone (at least from a software perspective) ready for whatever your next step is.
Have questions for Stevo about this blog? Feel free to shoot an email over to email@example.com or submit a case in the Bravo Solution Center.