Gateway Offers Trade-In Deal, but Values Will Barely Chip Away at Price

Gateway Inc. became the first computer company to borrow another tactic from the car business, allowing customers to trade in even rivals’ old personal computers and apply the value toward a new machine.

The San Diego-based PC maker began offering the trade-in deal Thursday to businesses and to consumers who made orders over the phone, and it plans to have the trade-in deal available on its Web site Monday, said spokesman Brad Williams.

Until Sept. 30, only PCs with speedy Pentium and equivalent chips will be accepted. After that, almost any old clunker PC will do (but no Apples, please).

Consumers will be instructed to wipe out personal information and ship the computers to third parties, who will reinstall Windows and sell the machines again, mostly overseas. Gateway will direct those who want to part with machines of a certain age to a charity: Keep the receipt and send it in for credit off a Gateway.

Gateway will rely on trade-in values from Orion Research Co.’s site, https://www.bluebook.com, which is still putting the finishing touches on a Web system that will charge $1.49 for a trade-in estimate.

But there is a whopper of a catch. People are going to be shocked by how little their faithful old PCs are worth.

How much credit would a consumer get for a Compaq Presario 650 desktop PC from 1994 with an Intel 486 chip that still runs like new? Orion says $4.

And even a 1999 Dell Dimension with a Celeron 400-megahertz chip, still listed for more than $1,000 new from Dell Computer Corp., which a dealer would sell for $441 used, has an average value of just $136 in Gateway’s trade-in deal.

“They still have a value for word-processing,” said Orion President Roger Rohrs. “By donating them, you can still do good for society.”

As for the sticker shock, Gateway’s Williams prefers to describe it as “an educational part of the trade-in.”

Other car-sales approaches, such as a push toward leases and purchasing extras like PC speakers and bundled Internet access, have already spread through the computer industry as sales growth has slowed.

Rohrs said he expected Dell and others to follow the trade-in program.