Why I won’t buy used terminals (and you shouldn’t either)

by Neil Moncrief on February 24, 2009

Several years ago, I decided to experiment with buying used terminals on eBay. At the time, new terminals cost much more than today’s prices. I needed an option to offer merchants who didn’t want to pay for a brand new terminal, but didn’t want to enter a long-term lease, either. (For the record, I oppose leasing. It always cost too much, in the long run.) My plan was to buy used terminals at auction prices, verify they worked, thoroughly clean them, then re-sale them as “refurbs.”

I had no trouble finding used terminals on eBay. Many of them claimed to be from store owners going out of business. The majority, however, were listed by eBay stores and other sellers who specialized in electronics. Some were even listed by salvage companies who described them as unclaimed merchandise. I selected 30-40 terminals in “good condition” that I was willing to buy at the right price, and I entered my bids using AuctionSniper.com. Within a week or two, I had purchased and received about fifteen terminals.

Maybe five or six arrived in good condition, with all parts included. These required only minor cleaning before I shipped them to clients. Of the remaining terminals, a few were missing power cords and/or modems, which I replaced at additional cost to me. Several others had minor damage, but were repairable using parts salvaged from the last group. The last group, as you’ve probably guessed, were all D.O.A. These four were good for nothing more than spare parts.

Another problem you’ll experience with used terminals is the inability to accept PIN-based debits. The credit card companies require that advanced encryption software be installed in terminals before they can accept PIN numbers. Since each credit card processor installs software specifically written to work with their network, it’s unlikely that any used terminal will be ready for PIN-based debits upon arrival. This software can be added, but it will require additional shipping and encryption charges.

I was able to repair and sell most of those refurbished terminals I bought on eBay. But considering the time and money I invested, and my losses on the four still sitting in my boneyard, I probably just broke even. The good news is that I’ve since found a new supplier with much better pricing. Now, I’m able to sell brand new terminals for the price of refurbs, so there’s no reason for my clients to take chances buying used.

If you’re in the market for a new terminal, let me suggest one of the Omni series by Verifone. They’re affordable, intuitive, and they’ll last for years.  And if your processor wants to charge you an arm and a leg for it, let me suggest you find a new processor.

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