Selling Refurbished Computers and Doing It Right

[Steve202]

Hang on a second, let me get this right. Do we have to provide the media on every install or only when we are upgrading to a different OS?

If its the former, then how is this possible when Microsoft provide you one CD for 20 licenses?

 

[anonymous Mac Tech]

If you are just reloading the current OS, you are not obligated to do anything more than to provide the original COA affixed on the computer that it was installed on. In fact, let me name off a few names for you

HP, Dell, Toshiba, Asus, Gateway, Acer, Emachine . . . starting to click now? When was the last time you got a disk from them.

A new Windows license is not required for a refurbished PC that has:
(1) The original Certificate of Authenticity (COA) for a Windows operating system affixed to the PC, and
(2) The original recovery media or hard-disk based recovery image associated with the PC.

The operating system identified on the original COA indicates the edition of Windows that was originally licensed for that PC and the refurbisher can use either:
(1) The original recovery media or
(2) The original hard-disk based recovery image to reinstall the operating system software specified on the COA.

If the original recovery media is not present, an end user can contact the original equipment manufacturer (OEM) of the PC to obtain the appropriate recovery media for a fee—subject to availability. Second-hand recovery media is sometimes offered for sale by individuals in various forums and markets. Purchasing media from unknown sources is not recommended as it introduces the risks of copyright infringement, improper licensing and infected/corrupted or incomplete software.

A new Windows license is required for a refurbished PC if:
(1) The refurbisher cannot obtain the original recovery media or
(2) The PC does not have a hard-disk based recovery image.
The refurbisher must purchase a new Windows license in order to provide the purchaser of the refurbished PC with a genuine, licensed version of Windows on the PC.

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=c9SteqwP46l

 

[PCX]

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=c9SteqwP46l

In any case, we follow Microsoft contradicting EULA. We make sure that the original copy of Windows is installed and that the original COA is affixed. When feasible, we will make the recovery disks or leave the recovery partition intact. If and when we actually use the refurbished licenses for upgrades on a refurbished unit, we follow the EULA to a T.

That said, I do not know anyone on here to does not install install a CLEAN copy of Windows on just about every unit or excepts the EULA for the customer. If we really wanted to, we could go on argue about all of these topics, all of which really have nothing to do with, what computers to buy, where to buy them, how to sell them, how to ultimately make a profit, ect. This thread, was in response to those who felt that you could not make a profit refurbishing computers . . . nothing more nothing less.

 

[Steve202]

Makes sense now, had visions of having to buy extra CDs from Microsoft.

 

[FoolishTech]

npinc, PCX, and Mac guy, none of you quite have it down pat.....

Yes, a refurbished computer requires a new Windows license.

However, what Microsoft considers a refurbished computer is one that has been significantly upgraded, else they consider it a used or 2nd hand computer, which does NOT need a new Windows license.

Taken from the licensing FAQ on the link Mac guy posted:

Q. What is the difference between a refurbished PC and a used PC?
A. A refurbished PC is a computer system that has had substantial hardware modifications that may require a new operating system license—because the modifications have essentially created a "new" PC.

Generally, an end user can upgrade or replace all of the hardware components on a computer—except the motherboard—and still retain the license for the original Microsoft OEM operating system software. If the motherboard is upgraded or replaced for reasons other than a defect, then a new computer has been created. Microsoft OEM operating system software cannot be transferred to the new computer, and the license of new operating system software is required.

If the motherboard is replaced because it is defective, you do not need to acquire a new operating system license for the PC as long as the replacement motherboard is the same make/model or the same manufacturer's replacement/equivalent, as defined by the manufacturer's warranty.

A used PC is a computer system that has had few or no hardware changes. The license for OEM software on a used PC may not be transferred to a new or different PC. However, the entire used PC, including the software media, manuals, and Certificate of Authenticity, may be transferred to another end user along with the software license rights.

Q. Can I sell secondhand computer systems with the original Microsoft software, or will a new license be required before selling?
A. Please look at the End User Software License Terms to find out which type of license has been issued for the Microsoft software on the computer system and check the provisions relating to transfer. To find and read the End User Software License Terms, click Start on the taskbar, click Help and Support, and do a search for eula.txt.

Generally speaking, in the case of OEM or OEM System Builder software, the license may not be transferred to a new or different PC. However, the entire used PC, including the software media, manuals, and Certificate of Authenticity, may be transferred to another end user along with the software license rights.

 

[PCX]

npinc, PCX, and Mac guy, none of you quite have it down pat.....

Yes, a refurbished computer being sold requires a new Windows license.

However, what Microsoft considers a refurbished computer is one that has been significantly upgraded, else they consider it a used or 2nd hand computer, which does NOT need a new Windows license.

Taken from the licensing FAQ on the link Mac guy posted:

Thank you Foolish, that is pretty much what I said the first time . . .

 

[PCX]

Makes sense now, had visions of having to buy extra CDs from Microsoft.

No, that's just ridicules. If anything, we try and make a recovery disk from the original hard drive (when feasible) for the new customers. Sometimes we can do it, sometimes we can't. I will say that we do not bend over backwards to do it though . . . in other words, I wont be fumbling around a failing or infected hard drive to try and get the recovery partition or disks. We provide each customer with a completely updated and clean Windows installation with essentials like java, flash, silverlight, codecs, etc.

 

[anonymous Mac Tech]

npinc, PCX, and Mac guy, none of you quite have it down pat.....

Yes, a refurbished computer requires a new Windows license.

However, what Microsoft considers a refurbished computer is one that has been significantly upgraded, else they consider it a used or 2nd hand computer, which does NOT need a new Windows license.

I don't understand what I don't quite have down pat. I simply posted a direct quote from the EULA.

Furthermore, from the same source:

A refurbished PC is a used PC that has gone through one or more of the following processes that leave the PC ready for use by a new owner:
● Data wiping
● Testing
● Cosmetic repair and/or replacement of defective minor PC components

With respect to operating system licensing, a PC is considered to be a refurbished PC if it has the original motherboard, or a replacement was made of a defective motherboard with one of exactly the same make, model and specification. Major repairs, such as the installation of a new model motherboard, results in a “new” PC and not a “refurbished” PC.

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=c9SteqwP46l

 

[npinc]

npinc, PCX, and Mac guy, none of you quite have it down pat.....

Yes, a refurbished computer requires a new Windows license.

However, what Microsoft considers a refurbished computer is one that has been significantly upgraded, else they consider it a used or 2nd hand computer, which does NOT need a new Windows license.

Taken from the licensing FAQ on the link Mac guy posted:

Hi FoolishTech..

Here's the difference. A COA is NOT a license. It's an indication that you have a license. The only valid license is media and COA (and manuals, if applicable). Only Microsoft OEMs are allowed to sell a computer with a license and a recovery partition, because they adhere to other legal and contractual obligations.

For more information see http://oem.microsoft.com/public/worldwide/refurb/microsoft_refurbished_pc_licensing_guidelines.pdf

Please note, in particular, what qualifies as a refurbished PC:

What is a Refurbished PC?
A refurbished PC is a used PC that has gone through one or more of the following processes that leave the PC ready for use by a new owner:
● Data wiping
● Testing
● Cosmetic repair and/or replacement of defective minor PC components

Therefore, unless PCX is failing to protect the privacy of the clients according to privacy laws and/or properly test them to ensure that they are qualified for resale, the computers he's selling are refurbished, and thus in violation of Microsoft's EULA.

I admit that Microsoft's Licensing agreements are very confusing and easy to cherry pick, but that doesn't absolve us of our duties to both them and our clients.

 

[PCX]

Hi FoolishTech..

Here's the difference. A COA is NOT a license. It's an indication that you have a license. The only valid license is media and COA (and manuals, if applicable). Only Microsoft OEMs are allowed to sell a computer with a license and a recovery partition, because they adhere to other legal and contractual obligations.

For more information see http://oem.microsoft.com/public/worldwide/refurb/microsoft_refurbished_pc_licensing_guidelines.pdf

Please note, in particular, what qualifies as a refurbished PC:

What is a Refurbished PC?
A refurbished PC is a used PC that has gone through one or more of the following processes that leave the PC ready for use by a new owner:
● Data wiping
● Testing
● Cosmetic repair and/or replacement of defective minor PC components

Therefore, unless PCX is failing to protect the privacy of the clients according to privacy laws and/or properly test them to ensure that they are qualified for resale, the computers he's selling are refurbished, and thus in violation of Microsoft's EULA.

I admit that Microsofts Licensing agreements are very confusing and easy to cherry pick, but that doesn't absolve us of our duties to both them and our clients.

Wow, NPINC, it's almost like you turned into a completely different person. I wish you had taken this approach this first time, rather than immediately assuming that my intentions are to screw over my customers. From what I understand, those quotes that describes a refurbished PC are in context with the Microsoft Refurbisher program, which again as I understand it, only pertains to those who are using Microsoft Refurbisher Licenses, in which case, I am within their EULA.

Finally, I will look further into this but as far as I am concerned, I am doing everything I possibly can (within reason) to stay within the EULA, take care of my customers and to do things as legitimately as possible in everything that we do.

 

[npinc]

Like I said, it's easy to cherry pick the EULA because it's such an organizational mess. By definition, however, you are a refurbisher.

Microsoft Registered Refurbisher. This program is for small and midsize refurbishers across the globe that wish to supply refurbished PCs preinstalled with genuine Microsoft software to local consumers and businesses, as well as to qualified charities, nonprofits, schools, and government programs.

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=KFMmvN2s8yV

That's the program you want to register for.

There is a way around it. You must keep the original recovery partition intact. To do that, however, you can't wipe the drive. That puts you at risk of privacy violations and other software licensing issues. The classic definition of being caught between a rock and a hard place.

For the record, that's exactly why I don't refurbish computers. I buy them from the channel with the MAR COA and media provided. Buying from channel also allows me to offer a 1, 2 or 3 year warranty with them as well.

 

[PCX]

Like I said, it's easy to cherry pick the EULA because it's such an organizational mess. By definition, however, you are a refurbisher.

Microsoft Registered Refurbisher. This program is for small and midsize refurbishers across the globe that wish to supply refurbished PCs preinstalled with genuine Microsoft software to local consumers and businesses, as well as to qualified charities, nonprofits, schools, and government programs.

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=KFMmvN2s8yV

That's the program you want to register for.

There is a way around it. You must keep the original recovery partition intact. To do that, however, you can't wipe the drive. That puts you at risk of privacy violations and other software licensing issues. The classic definition of being caught between a rock and a hard place.

For the record, that's exactly why I don't refurbish computers. I buy them from the channel with the MAR COA and media provided. Buying from channel also allows me to offer a 1, 2 or 3 year warranty with them as well.

Well, unfortunately, I think too much of the EULA and many laws in general or are up for interpretation and in many case circumstantial at best . . . then again, I am not a lawyer, that is just the impression I am left with.

Anyways, my suggestion is this. If it makes your feel better to stay away from refurbs so that you do not have to feel like you are walking on glass or feel guilty about some how violating the EULA, then that is probably the best course for you. As for the rest of us, I suggest that we do our best to research the topic and stay within the EULA to the best of our understanding. If you find yourself at fault, then fix it and move on.

 

[anonymous Mac Tech]

Like I said, it's easy to cherry pick the EULA because it's such an organizational mess. By definition, however, you are a refurbisher.

Microsoft Registered Refurbisher. This program is for small and midsize refurbishers across the globe that wish to supply refurbished PCs preinstalled with genuine Microsoft software to local consumers and businesses, as well as to qualified charities, nonprofits, schools, and government programs.

http://www.microsoft.com/OEM/en/lic...es/refurbisher_programs.aspx#fbid=KFMmvN2s8yV

That's the program you want to register for.

There is a way around it. You must keep the original recovery partition intact. To do that, however, you can't wipe the drive. That puts you at risk of privacy violations and other software licensing issues. The classic definition of being caught between a rock and a hard place.

For the record, that's exactly why I don't refurbish computers. I buy them from the channel with the MAR COA and media provided. Buying from channel also allows me to offer a 1, 2 or 3 year warranty with them as well.

Thanks for helping in clearing up any misinformation that might have previously been posted. Especially since the title of the thread was Selling Refurbished Computers and Doing It Right.

 

[npinc]

Thanks for helping in clearing up any misinformation that might have previously been posted. Especially since the title of the thread was Selling Refurbished Computers and Doing It Right.

I know a local shop that got busted twice by Microsoft for this and paid very hefty fines. Microsoft has actually come into our shop twice and checked for license compliance as well. Both times we were unaware and got a letter that we'd "passed the test".

 

[Bryce W]

Cleaned this thread up. You are welcome to debate the Microsoft EULA, but keep the personal attacks out of it.

 

[Tony_Scarpelli]

Issue one- how to get the equipment

We put up a sign that says we are a recycle center. Since then we have had hundreds of pc's and laptops dropped off sometimes dozen at a time.

Issue two- how to load the os.

We also repair computers. We always ask the client for their discs and so we have made our selve copies of all the discs that have gone through here so that we can easily reload the different models and brands. Sometimes we use OEM media other times we use media from Dell, HP, Compaq.

Issue three - how to price.

We tend to price used equipment at 75% of similarly speed new equipment. In the case of single core cpus we usually sell them about $99, duel cores about $199 and quad cores about $399. This is plus or minus for extra ram, special equipment type dvd writers and such. Pro or ultimate versions sell for bit more than home versions of anything. We also add or subtract $20-40 depending on condition....Looks new add, looks like hell subtract. Similarly if it has paperwork books or original disc's then we add to the price. The closer it is to new the higher the price. You get a feel for it.

Dells sell the best, followed by HP/compaq. Other brands seem to sell like custom systems with no preferences accept when talking about notebooks Toshiba is best, HP/Dell are equal.

We sell the same speed laptops for about $50 more than workstation of the same CPU speed, add $40 for 17" screen, deduct $20-30 for a smaller than 15" screen.

Most of our customers do not understand the CPU, Ram drive sizes so they buy based on condition and how it looks and if we tell them it is a better or worse machine than the next one. So condition is most important aspect to selling refurbs.

We use words interchangeable Lightly Used, Re-newed, Rebuilt, Open box, off lease and refurbished.

 

[PCX]

Issue one- how to get the equipment

We put up a sign that says we are a recycle center. Since then we have had hundreds of pc's and laptops dropped off sometimes dozen at a time.

Issue two- how to load the os.

We also repair computers. We always ask the client for their discs and so we have made our selve copies of all the discs that have gone through here so that we can easily reload the different models and brands. Sometimes we use OEM media other times we use media from Dell, HP, Compaq.

Issue three - how to price.

We tend to price used equipment at 75% of similarly speed new equipment. In the case of single core cpus we usually sell them about $99, duel cores about $199 and quad cores about $399. This is plus or minus for extra ram, special equipment type dvd writers and such. Pro or ultimate versions sell for bit more than home versions of anything. We also add or subtract $20-40 depending on condition....Looks new add, looks like hell subtract. Similarly if it has paperwork books or original disc's then we add to the price. The closer it is to new the higher the price. You get a feel for it.

Dells sell the best, followed by HP/compaq. Other brands seem to sell like custom systems with no preferences accept when talking about notebooks Toshiba is best, HP/Dell are equal.

We sell the same speed laptops for about $50 more than workstation of the same CPU speed, add $40 for 17" screen, deduct $20-30 for a smaller than 15" screen.

Most of our customers do not understand the CPU, Ram drive sizes so they buy based on condition and how it looks and if we tell them it is a better or worse machine than the next one. So condition is most important aspect to selling refurbs.

We use words interchangeable Lightly Used, Re-newed, Rebuilt, Open box, off lease and refurbished.

Awesome, great advice man. Thanks for contributing to the thread.

 

[TenYardFight]

Scarpelli is the man. Spot on as always!

 

[Tucson Techie]

I know a local shop that got busted twice by Microsoft for this and paid very hefty fines. Microsoft has actually come into our shop twice and checked for license compliance as well. Both times we were unaware and got a letter that we'd "passed the test".

Out of curiosity how did Microsoft "check" for license compliance? or do you know? I suppose they sent in a spy to ask loaded and incriminating questions or made violating requests of your services.

 

[npinc]

Out of curiosity how did Microsoft "check" for license compliance? or do you know? I suppose they sent in a spy to ask loaded and incriminating questions or made violating requests of your services.

To give you any kind of definitive answer other than to say "a mystery shopper visited us and inquired about a computer" I'd be making stuff up.

Even the letter is only signed (with initials only):

Yours trulv.

Anti-Piracy Team
Legal and Corporate Affairs
Microsoft Canada Inc..

FUNNY ENOUGH.. Now that I'm thinking about it. On both letters, half way down, there's a statement that reads as follows:

We would also like to take this opportunity to remind you that a standalone Certificate of
Authenticity (COA) is not a license to install or use Microsoft software. A COA is just one
component of a genuine package of Microsoft software and on its own does not convey any
license or permission to use Microsoft software.​

If you want, you can read the full letter. I can send you a link.