How Costco and Phobio created a Member-driven device upgrade ecosystem

The Solution: A Seamless Trade-In Experience Built on Trust

Costco selected Phobio as its trade-in partner, launching the program in 2019 with a focus on simplicity, transparency, and member value. The program design prioritized the unique needs of Costco’s membership base while maintaining the operational excellence both brands are known for.

The trade-in process exemplifies efficiency and member-centricity. Costco members begin by receiving an instant quote for their Apple devices, smartphones, and tablets through an online evaluation tool. Once they accept the offer, Phobio sends secure packaging materials directly to their home. Members simply pack their device and drop it off for shipping using the prepaid label. After Phobio completes its professional evaluation and data-secure processing, members receive their payment via Costco Shop Card, either mailed or delivered electronically.

This streamlined approach removes every friction point from the traditional trade-in experience. No trips to a store. No haggling over values. No concerns about data security. Just a transparent, professional service that respects members’ time and trust.

The Results: Exceeding Expectations Across Every Metric

The partnership’s performance has surpassed initial projections, delivering exceptional value across multiple dimensions:

Financial Impact

The program has generated remarkable financial returns for both members and Costco. Members have collectively reduced their upgrade costs by approximately 20%. Since inception, this virtuous cycle has driven increased purchases, creating a self-reinforcing ecosystem of value.

Member Satisfaction and Engagement

The program’s success extends beyond financial metrics to deeply impact member behavior and satisfaction. Customer satisfaction scores exceed 90%, demonstrating strong approval of the service experience. Perhaps most tellingly, the program boasts a 60% repeat participation rate, indicating that members who try the service become loyal users. This engagement strengthens the overall Costco membership value proposition, contributing to the retailer’s industry-leading renewal rates.

Strategic Category Growth

By removing the friction from device upgrades, the program has positioned Costco more prominently in the competitive consumer electronics category. Members who might have previously purchased devices elsewhere now see Costco as their primary technology destination, knowing they can seamlessly trade in their old devices as part of the upgrade process. This has resulted in larger basket sizes in strategic categories and increased member spending power across the warehouse.

Environmental Leadership: Sustainability at Scale

The partnership’s environmental impact demonstrates how business success and environmental stewardship can align.

Phobio’s commitment to transparency means these environmental achievements aren’t just corporate statistics—they’re displayed directly in the customer offer view, allowing members to see the immediate environmental impact of their trade-in decision. This transparency resonates with Costco’s increasingly environmentally conscious membership base, particularly younger members who prioritize sustainability in their purchasing decisions.

Why It Works: The Strategic Advantages

The program’s success stems from several strategic advantages that create value for all stakeholders:

Trust and Transparency: Costco members trust the program because it operates with complete transparency—instant quotes, clear communication, and fair values that reflect market reality. This trust is reinforced by Costco’s brand reputation and Phobio’s professional handling of the entire process.

Convenience Without Compromise: The entirely remote, mail-based process respects members’ time while maintaining security and professionalism. Members never have to visit a store or meet with a representative, yet they receive the same or better value than traditional trade-in channels.

Value Reinvestment: By issuing trade-in value as Costco Shop Cards, the program ensures that value stays within the Costco ecosystem. Members can apply their trade-in value to any purchase, from their next device upgrade to everyday essentials, maximizing flexibility and utility.

Data Security Excellence: Phobio’s certified data wiping and device processing procedures give members complete confidence that their personal information is protected, addressing one of the primary concerns preventing device trade-ins.

A Partnership Model for the Circular Economy

The Costco-Phobio partnership represents more than a successful business venture—it’s a blueprint for how retailers can create value through the circular economy. By turning idle assets into purchasing power, simplifying complex processes, and delivering measurable environmental benefits, the program demonstrates that member value and sustainability are not competing priorities but complementary goals.

For Costco, the program reinforces its position as a member-first retailer that consistently finds innovative ways to deliver value. For Phobio, the partnership validates its vision of making device trade-in accessible, trustworthy, and valuable for consumers at scale. For members, it’s simply another reason why their Costco membership continues to pay dividends, turning yesterday’s technology into tomorrow’s purchases while contributing to a more sustainable future.

As consumer electronics continue to evolve at an accelerating pace, programs like this will become increasingly essential—not just for extracting value from old devices, but for creating sustainable consumption patterns that benefit businesses, consumers, and the planet alike.