Costco has quietly turned junk-drawer electronics into a grocery budget tool, letting shoppers swap aging phones and laptops for digital gift cards that spend like cash in the warehouse aisles. Instead of letting an old iPhone or Xbox gather dust, you can turn it into a cart of rotisserie chickens, pantry staples, or even a tank of gas. The trick is understanding how Costco’s trade-in system works, what devices qualify, and how to squeeze the most value out of gear you might have written off as worthless.
I see this program as part decluttering strategy, part inflation hedge: you clean out a closet and walk away with store credit that can cover a week’s worth of groceries. The process is handled online, the shipping is free, and the payout arrives as a digital Costco Shop Card that you can use in the warehouse, at the food court, or on Costco.com.
How Costco’s trade-in pipeline actually works
At the center of this deal is a dedicated trade-in portal that Costco runs with a specialist partner, rather than handling old devices at the returns desk. When you start a trade, you are routed to a site operated by Phobio, the third-party company that manages Costco’s official trade-in program. There, you pick your device category, choose the closest matching model, and answer a series of condition questions that determine an initial quote.
Once you accept that estimate, you print a prepaid shipping label, pack up the phone, tablet, laptop, gaming console, or other gadget, and send it in for inspection. After Phobio evaluates the hardware and confirms its condition, the company issues a Costco Shop Card in the quoted amount, delivered digitally so you can spend it on groceries or anything else in the warehouse. If the inspection finds the device is in worse shape than you described, the offer can be adjusted, but you can decline and have the item returned if the new number does not work for you.
From junk drawer to grocery cart: why this feels like “free food”
The appeal here is psychological as much as financial. Many households have a drawer or bin full of retired tech that no one has bothered to sell, either because the resale value seems too low or the process feels like a hassle. Costco leans into that reality by framing the trade-in as a way to turn forgotten electronics into what amounts to free groceries, a pitch that shows up explicitly in coverage that asks, “Have some old electronics around the house?” and notes that You might be able to turn those into free groceries. When you are swapping something you no longer use for a cart of food, it feels less like spending and more like unlocking value that was already yours.
That framing is especially powerful around big shopping moments, when budgets are stretched and people are looking for ways to offset the cost of holiday meals or bulk staples. One detailed walkthrough of the program spells out that big-box wholesaler Costco offers this trade-in option so members can clean out old tech and effectively fund a grocery run with the proceeds, turning a forgotten iPad or Android phone into a digital Shop Card that behaves like cash at the register. In practice, that means a device that has been idle for years can suddenly cover a month of coffee beans, a stack of frozen pizzas, or a full Costco bakery spread for a family gathering.
Step-by-step: how to start a trade and lock in an offer
To actually get from dusty gadget to digital gift card, you begin online rather than at a warehouse counter. The process starts with a simple questionnaire where you identify the brand, model, storage capacity, and carrier status of your device, then answer condition prompts about screen cracks, battery health, and functionality. One guide to the program notes that big-box wholesaler Costco offers this streamlined flow so you can get an instant offer based on your answers, with the system adjusting the quote as you toggle between options like “no noticeable scratches” or “significant wear” on the screen and body, a structure laid out in detail under the explanation of how the offer is generated.
After you see the estimated value, you decide whether it is worth proceeding. If you accept, you provide your contact information, confirm that you will wipe your data, and generate a prepaid shipping label. Another breakdown of how it works emphasizes that you do not need to be a Costco member to initiate the trade, but you do need to be comfortable shipping the device to the evaluator and waiting for the inspection before the Shop Card is issued. For most people, the heaviest lift is boxing up the gadget and dropping it off, since the label and instructions are provided for free.
What devices qualify, and what they might be worth
The trade-in catalog is not limited to one brand or category, which is part of what makes the program useful for households with a mix of gear. Costco’s partner accepts a variety of electronics, including smartphones, tablets, laptops, and gaming consoles, along with some wearables and media players. A detailed explainer on how it works notes that the questionnaire covers everything from recent flagship phones to older media players, with even low-value items sometimes qualifying for a small credit instead of going straight to the recycling bin.
On the higher end, recent Apple and Android phones in good condition can fetch enough to cover a sizable grocery haul, while older tablets, Chromebooks, or game systems might translate into a smaller but still meaningful Shop Card. One analysis of how Costco structures the program points out that you provide a few details about the device and then choose the type of card you request, with the system showing you the dollar amount before you commit. Even if the quote is modest, the trade can still be attractive if the alternative is letting the device sit unused or paying separately to recycle it.
Apple gear, Costco Trade-Up, and the Phobio connection
Apple hardware plays a prominent role in the trade-in mix, in part because those devices tend to hold value longer than many competitors. Costco’s trade-in program explicitly calls out Apple devices and select products from other brands as eligible for gift card credit, and coverage of the partnership notes that Costco offers a trade-in program for Apple devices and select devices from other manufacturers through its online portal. In practice, that means an older iPhone, iPad, or MacBook can become a Costco Shop Card that you can swipe at the register, a flow described in detail in reporting on how Costco’s Trade system evaluates your item for its trade-in value.
Behind the scenes, the Costco Trade-Up Program is powered by Phobio, which specializes in refurbishing and reselling used electronics. One overview of How Does the Program Work explains that You essentially assess your item’s condition yourself, then Phobio confirms that assessment and either approves the original quote or adjusts it. Another description of the Costco Trade Up Program notes that They are allowing members to send in old smartphones, tablets, laptops, and gaming consoles in exchange for store credit, which turns the warehouse into a kind of reverse electronics store where your outdated gear becomes a grocery budget line.
How much you can realistically get, and how you are paid
The payout is not a mystery; you see a dollar figure before you ever tape up a box. The amount you can receive depends on the device model, its age, and its condition, with newer flagship phones and laptops commanding the highest offers. A practical guide that spells out The amount you can receive notes that payouts arrive as either a physical or digital Costco Shop Card, and that opting for a digital gift card is faster if you want to start shopping for groceries as soon as the inspection clears.
Because the Shop Card functions like cash at Costco, the trade-in effectively becomes a targeted rebate on your food and household spending. One explainer on How the Costco Trade program works emphasizes that Costco will give you free groceries in exchange for your old electronics by issuing a Shop Card after the device is evaluated, which you can then use on anything from produce to paper towels. For shoppers who already rely on Costco for bulk staples, that credit can offset a meaningful slice of the monthly bill.
Why Costco is doing this, and why it can be worth it for you
From Costco’s perspective, the trade-in program solves several problems at once. It encourages members to stay in the ecosystem by giving them another reason to visit the warehouse or shop online, it supports environmental goals by keeping electronics out of landfills, and it leverages a partner that already knows how to refurbish and resell used gear. A breakdown of Why participate in Costco’s Trade program notes that Costco Will Give You Free Groceries in Exchange for Old Electronics, Here is How To Take Advantage, and frames the initiative as a way to monetize devices that would otherwise just be collecting dust.
For shoppers, the upside is straightforward: you convert clutter into store credit without haggling on resale sites or meeting strangers in parking lots. One consumer-focused explanation of The Costco Trade program highlights that you can test it out with a single device, see how the evaluation and payment work, and then decide whether to send in more. If you are already shopping at Costco regularly, the Shop Card feels like found money, especially when you apply it to essentials like milk, eggs, and pantry staples that you would have bought anyway.
How to prep your device and avoid common pitfalls
There are a few practical steps that can make the difference between a smooth trade and a frustrating one. Before you ship anything, you should back up your data, sign out of cloud accounts, remove SIM cards, and perform a factory reset so the device is wiped clean. A detailed explanation of How Does the Program Work underscores that You essentially assess your item’s condition yourself and are responsible for making sure you have erased your data off it before shipping, which protects your privacy and speeds up the evaluation.
It is also worth being brutally honest about the device’s condition when you answer the questionnaire. One analysis of How Does the Program Work notes that You essentially assess your item’s condition and that even a damaged device is better than nothing, but overstating its shape can lead to a lower revised offer after inspection. If you describe cracked screens, worn batteries, or missing accessories accurately, you are more likely to see the original quote honored and the Shop Card issued quickly, which gets you to that free Costco grocery run with less friction.
More from MorningOverview