2023 Recession. IT asset disposition. Lawsuits. Illegal dumping. Abandoned e-waste. Data breaches. Cost increases. Shrinking rebates. Declining service.
Take a minute to think about the companies you do business with and make a quick list of the ones you suspect are feeling the effects of the recession. Did your tech recycler come to mind? Perhaps not, but you should give them a second thought for several reasons. While your tech recycler’s labor and waste costs are trending upward, the revenue they’re earning from used equipment sales and scrap material is trending downward.
These market challenges could force some tech recyclers, also known as Information Technology Asset Disposition (ITAD) providers, to make tough business decisions in the coming months. The risk to you is when your ITAD partner makes a shortsighted decision that has detrimental effects on your business.
Here are five things to watch for in 2023:
1. YOU COULD BE LIABLE FOR CLEAN-UP COSTS IF YOUR ITAD PROVIDER GOES OUT OF BUSINESS
A real example of abandoned e-waste
Many of us have heard true crime stories in which tech recyclers were caught shipping equipment overseas, dumping items in lakes, or stockpiling used assets and then abandoning them so they become someone else’s problem. Unfortunately, if the equipment’s serial numbers, asset tags, service tags, or hard drive data show evidence of your company’s ownership, that “someone else” could be you.
One such story involved two Ohio warehouse owners, Garrison Southfield Park and Olympic USA, who got stuck with over 158 million pounds of abandoned CRT materials on their properties. The estimated clean-up costs were $18.2 million. To help recoup their expenses, they filed a lawsuit against Closed Loop Refining and Recovery, a few e-scrap suppliers, and well-known electronic manufacturers including ASUS Computer International, Dell Technologies, LG Electronics, Samsung Electronics, Sony Electronics, along with others. On October 7, 2022, a lawsuit mirroring the Ohio case, was filed by two Phoenix warehouses to help cover estimated cleanup costs of over $15 million at their properties. While Closed Loop’s legal battle and its lengthy list of defendants and settlements have shifted many times throughout the years, do not ignore the lessons from this cautionary tale.
PARTNER WITH AN ITAD PROVIDER YOU CAN TRUST.
Finding the right ITAD partner can help you avoid litigation, protect your reputation, and uphold environmental regulations. We hold ourselves to the highest standards which are proven with certifications in e-Stewards, NAID AAA, ISO 9001, and ISO 14001. Plus we follow NIST 800-88 guidelines for electronic and physical data destruction methods. Would like to see for yourself how these standards affect the quality of our work, the safety of our facility, and the security of our processes? Contact us. We would love to give you a tour.
2. YOUR RISK FOR DATA BREACHES INCREASES IF YOUR ITAD PROVIDER STARTS CUTTING CORNERS
A real example of stockpiled e-waste
During tough times, ITAD providers must prioritize expenses like equipment maintenance, labor, and contracted outside services. But proper data protection and destruction requires reliable processes. Even small breakdowns in the system can create slower processing times, stockpiles of equipment, improper destruction, and opportunities for sensitive data to find its way into the wrong hands.
Banking giant Morgan Stanley (MSSB) finalized a legal settlement in 2022 in which they will pay $68.2 million to protect customer data they cannot account for and to hire outside firms to track down retired assets. MSSB decided to decommission two data centers for a cheaper price by hiring a moving company with no knowledge or experience in electronic data destruction. The assets containing encrypted data were sold online, including some hard drives purchased by an IT consultant in Oklahoma. When the consultant discovered the sensitive data and notified MSSB, it kicked off an investigation. Although MSSB has recovered some of the devices, many are unaccounted for as no disposition reports or certificates of destruction were provided.
SEEK OUT AN ITAD PARTNER WHO PROVIDES CONSISTENT, RELIABLE SERVICE EVERY TIME.
Cascade is one of a limited number of solution providers that has NAID AAA Certification. Because we follow this comprehensive program, you can rest assured that your equipment is in the hands of a partner you can trust. One hundred percent of our staff passed a background check and completed extensive training on how to secure assets in our trucks and facilities. We perform regular maintenance checks on equipment to ensure proper data destruction. We carefully review outsourced services and downstream processors to ensure they meet our standards. Lastly, we offer “Cascade Tracker, a web portal where you can securely access disposition information from receipt to final disposition if you elect to use our asset tracking services. If you decide to sell your used assets, Cascade Tracker provides rebate reports. You can easily download or integrate our reports into your asset-tracking software.
3. YOU QUESTION IF YOUR ITAD PROVIDER IS TAKING MORE THAN THEIR FAIR SHARE OF YOUR REBATE BECAUSE ITS DROPPING
Example report in Cascade Tracker web portal
By selecting the option to sell your reusable equipment, you’re relying on your recycler to accurately track your devices, successfully remarket them and pay you according to your contract. In October 2022, T-Mobile USA filed a lawsuit against phone resale and recycling vendor Belmont Trading. T-Mobile claimed they were shortchanged $6.6 million in revenue for sales of reusable and end-of-life devices.
While not all companies have millions of dollars in resale revenue at stake, take a moment to review your ITAD’s rebate program. Can you request the sales price of each asset, the deductions applied to the asset for any upgrades or repairs, the revenue share, and the final price paid? Or do you get suspicious when you review your sales reports because they lack detail or use complicated equations for applying upgrades and repairs?
CONFIRM THAT YOUR COMPANY AND YOUR ITAD PROVIDER’S VALUES ALIGN.
Cascade’s core values are security, sustainability, savings, and satisfaction. We put them to work by reselling your used equipment so you can earn revenue. We help you maximize your assets’ value by unlocking them with security tools, repairing broken devices, updating operating systems (we’re a Microsoft Authorized Refurbisher) and thoroughly testing them. You have visibility into each asset’s sale price via our line-item rebate reports available in the Cascade Tracker web portal. Some ITAD providers’ rebate calculations burden you with 100% of the upgrade costs. We split the expenses since both of us benefit from the enhancements. You can choose how to use the assets’ revenue: apply it to future projects or receive a payout. Our client Heartland Dental is just one example of how you can earn a financial return on resold equipment. Their rebates totaled $416,817.
4. YOU’RE FRUSTRATED BECAUSE YOUR ITAD SERVICE IS TAKING A TURN FOR THE WORSE
We track your assets throughout the process
You’ve been satisfied with the ITAD service your company has been using for the past few months, years, or even decades. But you start to see examples of how the tight job market and a slowing economy are affecting their service levels. No one is answering your emails and phone calls. They pushed back your scheduled equipment pick-up dates. When they finally arrived at your facility, they were late. Speaking of delays, when was the last time you saw your latest disposition reports, not to mention the resale rebates you were counting on?
YOUR TIME AND REPUTATION ARE VALUBLE. LOOK FOR AN ITAD PROVIDER YOU CAN TRUST TO DO THE JOB RIGHT.
Our easy, seamless ITAD process meets your high standards of security and service. When you work with Cascade, you receive a contract that offers clarity and peace of mind before our partnership begins. At the end of the project, we request feedback on your experience. We strive to be the leader in an industry where trust and reputation are crucial, and we’re happy to report we’re meeting that goal. Our satisfaction rating is over 99% positive.
One of our satisfied clients is Edward-Elmhurst Health, a large integrated health system in Illinois. They were using a provider that didn’t provide comprehensive ITAD services. Because of the lack of service and trust in their ITAD provider, Edward-Elmhurst implemented processes to destroy hard drives in-house. Eventually the extra time, labor, financial resources, security concerns, and reporting challenges proved too much, so they partnered with us. Edward-Elmhurst values our secure, HIPPA-compliant services for all their IT asset and mobile disposition needs. Not to mention, the rebates they earned from their retired equipment covered most of their program costs within the first six months.
5. YOU SEE RELENTLESS PRICE INCREASES FOR THE ITAD SERVICES YOU’VE ALWAYS USED
Our secure vehicles & reliable, trained staff will pick up assets at your facility
Pricing models in the ITAD industry seem to fall into two categories. Perhaps you use a recycler that always offered free, no-frills service, but you were just notified they’re now charging for their services. (And by the way, they plan to continue as a cut-rate service provider). Or maybe you partner with an ITAD provider that charges for their services. While you’ve seen occasional price increases in the past, their new rate hikes are above industry averages, or the frequency at which they’re rolling out the increases seems out of line.
THREE REASONS IT PAYS TO COMPARISON SHOP ITAD PROVIDERS: SECURITY, SERVICE, AND SAVINGS.
At Cascade, we help match your business and security requirements with our menu of services. Our knowledgeable sales and customer service teams assist you every step of the way so there are no surprises at the end of the project. Options include a full-service team that travels to your site, bulk pick-up service, shipments direct to our facility, and many options in between. While the changing economy is affecting our operations, we are very strategic with price changes and value communication with our customers. We can also help you reduce your overall ITAD costs by reselling your equipment. We start at a 50% revenue share which is paid in the form of a rebate. You can use the rebate for future invoices or request a payout.
If you’d like to perform a quick assessment of your current ITAD provider, download our RECESSION RISK CHECKLIST.