People are always asking me if I can get them a really good deal on a new PC. If the answer is yes, it's not because of any inside contacts. I tell them to hunt around for a refurbished computer.
All PC companies get returns from customers who, for one reason or another, decide not to keep a machine that they ordered. It's against the law for companies to resell those machines as new, so, in many cases, they wind up being resold as refurbished. Companies also sometimes need to get rid of excess inventory or machines that have been discontinued.
Refurbishing a computer generally starts by reformatting the hard disk and reloading the original software. Next the machine is inspected to make sure it's up to factory specifications. The companies I spoke with say they provide all new disks and manuals.
Although refurbished machines may have cosmetic flaws, they are basically as good as new. They are brought up to factory specifications and go through an inspection process that is sometimes more rigorous than what's done for new machines. I wouldn't worry if the PC has a few hours or even weeks of wear on it. That should have no impact on the life span of the system.
Some companies also sell discontinued merchandise at a reduced cost. Don't assume that a discontinued system necessarily includes out-of-date technology. Companies discontinue models for all sorts of reasons, including changes in styling and product names as well as to refresh the line.
This is not a "have it your way" business. Even the build-to-order mail-order houses such as Dell, Gateway and Micron won't custom configure a refurbished system, although you can always upgrade it after you buy it.
Don't expect the type of deep discounts that you get at factory outlets that sell clothing and sporting goods. Refurbished PCs are cheaper than new ones, but not wildly so. Dell shoots for between 5% and 15% discounts compared with equivalent new merchandise, according to Mark Grace, general manager of the Dell Factory Outlet. Dell occasionally offers specials on refurbished equipment, which could add a 10% or so discount. The magic discount number for Compaq is 20%, says company representative Tracey Trachta, but that varies by system. I found a couple of machines on Apple's and Micron's Web sites for 25% less than identical new models.
Your best bet is to compare the price of a refurbished machine with a comparable new system to be sure you're getting a reasonable price break. That's not always as easy as it sounds because the exact specifications of a refurbished system you're looking at may not be available on a new unit. At Dell, for example, I found a $2,724 notebook PC with 48 megabytes of memory, but the closest new system I could find (at $3,147) came with 64 MB.
Always ask about the warranty and the return policy, which are often not the same as new equipment. Compaq and Apple, for example, provide only a 90-day warranty on their refurbished PCs, compared with the one-year warranty on new home systems. Micron offers the same three-year warranty (five years on the processor and main memory) as on new systems, but unlike a new system, you don't get on-site service. If something breaks, they'll send you a replacement and talk you through the installation.
Dell actually offers a better warranty on refurbished Inspiron notebook PCs than it does on new equipment. All refurbished Dell computers come with a three-year limited warranty (one year on parts and service, and two years on parts only). New Dell desktops and Latitude notebooks have the same warranty, but new Inspiron notebook PCs come with only a one-year warranty.
Most companies will take returns on new equipment for up to 30 days but not on refurbished units. All sales of Micron refurbished PCs are final. Some companies give you a week or 10 days.
Ask about bundled software. All refurbished machines will come with the latest Windows or Macintosh operating system, but the bundled application software may not be the same as on new systems.
The easiest way to shop for a refurbished PC is to visit a company's Web site to see what's offered. But as Dell points out at its site for refurbished systems (http://www.austin360.com/dell), the listings are just "a sample of the configurations available." For a larger selection, you'll have to call Dell at (888) 243-9973.
You'll find refurbished and discontinued Macs under "special deals" in the Apple Store on Apple's Web site (http://www.apple.com). The day I checked, you could get a 266 MHz refurbished Power Macintosh G3 with 32 MB of RAM, a 4-gigabyte hard drive, a Zip drive and 2 MB of video memory for $1,699. The same machine new costs $2,119.
Micron's Web site (http://www.micronpc.com/sales/reconditioned.html) provides a specific system ID number for each machine listed. To order the machine, you call its sales department at (800) 730-0932. Micron's discounts are typically between 10% and 15%, says Jim Best, who manages the department that sells refurbished PCs. I found a 300 MHz Pentium II Micron Millennia with 64 MB of RAM and an 8.4 GB hard drive for $1,500, 19% cheaper than an identical new unit ($1,858) from Micron's build-to-order online store.
Compaq sells its systems through Compaq Works (http://www.compaqworks.com or  215-8864). The Web site is divided between "excess new" and refurbished units. Excess new machines are typically at the end of their product life, according to Trachta. The Web site has a place where you can subscribe to a product mailing list to hear about specials as they become available.
You may be able to find refurbished and used PCs at local dealers. If buying from a dealer, be sure to ask about the manufacturer's warranty and any store warranties. Although I'm not generally a big fan of spending extra money for an extended warranty, it might make sense for a refurbished machine.
Lawrence J. Magid can be reached at email@example.com. His Web page is at http://www.larrysworld.com or keyword LarryMagid on AOL.