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Retailers Play Harder on Secondhand Sales

RESALE GOES MAINSTREAM While developers wrestle with their own problems, such big name retailers as Target (Stock Quote: TGT) and Best Buy (Stock Quote: BBY) are also cashing in on America's secondhand craze. Target announced in August that it would begin doing trade-ins online, and just a day later Best Buy announced it would do the same thing, expanding its online service to nearly 600 stores, with the remaining 1,089 stores coming online this month.

"Last year, used video games generated close to $2 billion in the U.S.," explains Ed Woo, a retail analyst with Wedbush, a Los Angeles financial services and investment firm. "It's an area that's still growing rapidly, as used games grew 10% and will probably grow this year."

Toys R Us and other chains' plans for secondhand video game sales comes down to brand appeal. "At the end of the day, these retailers want to be known as the place to get games, and you see it with the pushing of electronics," Woo says. "They're trying to have better selection, pricing, customer service and support so that they're known as the place to go to get these products."

Not that shelf space for games is a bad thing. "We need the resellers and retailers to keep that space whether they're selling old or new," Noel says. "A kid goes to Best Buy, tries something with his buddies, there's a certain amount of product that gets purchased from those people as well."

ECONOMIC IMPLICATIONS The reliance on secondhand shopping has some economists concerned that our prolonged thrifty behavior could hurt our country's long-term growth. But Dian Chu, an economist and market analyst based in Houston, begs to differ.

"Americans are historically not good at saving," Chu says, "We're spenders. I don't believe that saving behavior will change or last long enough to have a significant impact on our economy." And compared with Japan, a country that has been fighting deflation for more than a decade, what Americans fear and feel today "is just a temporary thing because of the recession and the jobs market."

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