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Open-box, returned and/or repaired electronics of all kinds are frequently sold as refurbished, almost always with a guarantee of functionality and at a small discount. Refurbishment is especially common with more expensive types of electronics such as video game consoles and computer monitors, likely because these items have relatively high return rates (attributed to a combination of buyer's remorse and the fact that categories of electronics have a direct cost-to-complexity relationship; complex gadgets are more likely than simpler ones to have one or two defective components) and benefit more, sales-wise, from price-proportional discounts than cheaper items.
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In general, refurbished electronics are items that were returned for one reason or another, to the manufacturer. These items are then re-tested at the factory to make sure they are in tip-top shape. Any defective or damaged parts - if need be - will be replaced to restore the product to its original specification, and then the product is repackaged 'like new'.
However, consumer laws prevent manufacturers from selling anything considered factory refurbished electronics as 'new' since the original factory seal has been broken. Hence, these items are sold as 'refurbished products' often at deeply discounted prices.
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More specifically, reasons for returns include:
Customer Return: Most major online retailers offer a 30-day money back guarantee; during this period, a customer may return the product for whatever reason and still get full refund. If there is nothing wrong with the product, most stores will simple reduce the price and resell it as an 'open box' special. However, if there is some sort of defect, the product is returned to the manufacturer were it is inspected and/or repaired, and then repackaged for sale as a refurbished item.
Shipping and Exterior Damage: These include damaged packaging due to mishandling, the elements, etc., in which case the product itself may be perfectly fine. These may also include minor damage to the product exterior casing, such as dents, scratches, etc., and any other exterior damage that in it self would not affect the product performance. Retailers would normally return these products to the manufacturer. The manufacturer would inspect the product, replace any damaged casing, etc., and then repackage the item just like new. However, these items cannot be sold as new; hence they are tagged as refurbished electronics.
Demonstration Units: Sometimes, demonstration units at major retail stores, trade shows, and even returned items by product reviewers, are often returned to the manufacturer where they are inspected and/or repaired if needed, and repackaged as refurbished units.
Opened Box: If a box was simply opened, the item is often returned to the manufacturer where it is re-tested and repackaged. Even though technically, there is no issue here, yet the item cannot be classified as new; instead, it will have to be sold as refurbished electronics.
Defect During Production: If a specific component is identified as defective once the product leaves the factory, a manufacturer may recall a product from a specific batch or production run that exhibits the same defect. When this occurs, the manufacturer can decide to repair all returned defective units and send them back to retailers as refurbished units.
Overstock Items: While most retailers with an overstock of a particular item would simply reduce the price and put the item on sale for clearance, yet there are instances when a manufacturer wants to introduce a new model on the market at a time when there are still a substantial number of older models on stores shelves. In these circumstances, the manufacturer may opt to collect any remaining stock of the older model and redistribute them to specific refurb resellers for quick clearance. Overstock items are brand new items; these can be sold either as a 'special promos' for quick clearance, or can be labeled as refurbished electronics and sold at substantial discounts.
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