Wal-Mart Stores Inc., the world's largest retailer, later this month will let U.S. customers trade in their smartphones for credit toward new ones.
The chain will offer a $300 credit for Apple iPhone 5 handsets and $175 for Samsung Galaxy SIII phones, among other deals, the Bentonville, Arkansas-based company said today in a statement. The program will start Sept. 21 in 3,600 Wal-Mart and Sam's Club stores.
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The move, which follows similar efforts from Apple Inc., Best Buy Co., Target Corp. and RadioShack Corp., could drive traffic and boost sales in electronics and mobile phone accessories, said Brian Yarbrough, an analyst at Edward Jones & Co. in St. Louis.
"It's a way to be competitive and drive people into stores," Yarbrough said in a telephone interview. "They failed to gain strength in sales in electronics last quarter and this could help that category."
In its earnings report last month, Wal-Mart said it had "soft results" in electronics, though the wireless category showed sales strength. The company said it was the No. 1 handset retailer for the three months ending June 30.
Trade-in payments will be applied to new smartphones with two-year contracts from AT&T Inc., Verizon Wireless or Sprint Corp., or to prepaid plans. The credits range from $50 to $300 for phones that are working and aren't damaged.
"More and more, customers are choosing where they purchase new smartphones based on where they'll get the best value for their trade-ins," Steve Bratspies, executive vice president of general merchandise for the retailer in the U.S., said in the statement.
The program is also environmentally responsible because traded-in phones won't be sent to landfills, Wal-Mart said.
Jan Dawson, chief telecom analyst in the New York office of London-based research firm Ovum Ltd., called the move a "natural fit" for Wal-Mart, saying the company is "all about bringing good value and low prices to people."
"It should do fairly well because of that, and may even do better than some other retailers like carrier-owned stores, because they often don't do much to promote this option," Dawson said in an email.
Wal-Mart rose 0.2 percent to $73.66 at 9:30 a.m. in New York. Through yesterday, the shares had gained 7.7 percent this year, compared with a 17 percent advance for the Standard & Poor's 500 index.