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Don't Bother With GameStop's iPad Trade-In

NEW YORK ( MainStreet) -- GameStop (GME - Get Report) tends to be the first place gamers turn when they want to trade in their old video games for cash or store credit, and it's also the main destination for procuring used games.

But that doesn't mean gamers like it. The retail chain is notorious for offering low trade-in value for used games and then turning around and selling them at a much higher price. How much more? Well, in 2009 it was reported that GameStop made an average profit margin of 48% on used game sales, which speaks to how much the store marks up the used merchandise its customers trade in.

As it does with video games, GameStop offers little for your old iPad and sells it for a lot more.

That's why we were a bit skeptical when we heard GameStop also offers the ability to trade in (and buy) used iPads, as well as iPhones and iPods. GameStop has offered a marketplace for used Apple (AAPL - Get Report) products for some time now, but the company announced last week that it had just extended the program to its 1,000th store -- a well-timed announcement, of course, given that many people have been looking to trade in their old iPad to buy the new iPad announced Wednesday.

So how do the trade-in values stack up? About as well you'd expect from GameStop.

The maximum value you can get for the 32 GB Wi-Fi iPad 2 (which now sells for $499 new from the Apple Store) is $300, and GameStop will then sell that same model for $529 for a $229 profit (minus whatever it costs them to "refurbish" it).

By comparison, Amazon (AMZN) will offer a maximum of $375 for the same model in "like new" condition, or $337.50 if it's in "good" condition. eBay (EBAY) is less generous, offering only $306.64 for that 32 GB Wi-Fi model.

The gap becomes a lot wider, though, when you consider that the $300 maximum value offered by GameStop is in the form of store credit. if you want it in cash, you'll have to accept a 20% lower valuation, meaning you'll only get $240. By contrast, eBay will give you the money via PayPal (which can be used at most online retailers or simply withdrawn as cash). Amazon also gives you a gift card, but given that the retailer sells just about everything, its store credit goes a lot further than GameStop's, which primarily lets you buy only video games and used electronics.

To be fair, GameStop isn't necessarily the worst of the worst for trading in your iPad -- Best Buy (BBY), for instance, will only give you a $250 gift card for that model. Regardless, if you want to get some money for your old iPad, you'll want to shop around a bit first.

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