Many home appliance retailers, such as Gome (left), launch the "oldfor-new" program, which accounts for the sudden popularity of used appliance dealers (below). Photograph by China Foto Press

David Zhong, who runs an electric appliance shop in Zhejiang Second-hand Market, was puzzled at first by the sudden rise in his shop's popularity.

Many recent customers have a strange request: cheap old electric appliances costing less than 100 yuan (US$14.60). The cheaper the better, and they don't have to work.

All the customers are seeking coupons in the recently launched "old-for-new" home appliance campaign.

They receive a subsidy of up to 400 yuan to purchase a new energy-efficient appliance if they turn in an old one to a certified recycling company. Those without old appliances want to get in on the deal.

The old-for-new program is part of a national project that went into effect on July 1 and runs through May 31 next year.

It aims to encourage consumers to spend in the economic downturn, as well as to buy "green."

The program arrived in Hangzhou late last month.

There's not much in the way of requirements for the old appliances. Even if it doesn't work, if it's all in one piece and has all the parts, the owner can receive a certificate toward purchase of a new appliance.

By presenting the recycler's certificate to a designated retailer, customers can receive a 10 percent rebate or discount on the purchase price.

The plan covers five appliances: TV, 400 yuan maximum discount; refrigerator, 300 yuan; washing machine, 250 yuan; air-conditioner, 350 yuan; and computer, 400 yuan.

The ID and other information of the old appliance owner is recorded on the old-for-new certificate, so they cannot be sold or borrowed.

The program accounts for the sudden popularity of used appliance dealers like Zhong. However it doesn't increase turnover in second-hand shops as expected. They usually don't have such cheap appliances.

"We sell old electric appliances that can be used. That's also what we require when we collect them from residents. If they don't work, we break them up and sell them for scrap," says Zhong.

In one week, Zhong only sold one TV set for 60 yuan.

Among the five appliances, old TV sets are the cheapest. An old 21-inch CRT set that still works usually sells for 150 yuan, an old washing machine for more than 200 yuan, a fridge for more than 300 yuan, while an old air-conditioner sells for more than 400 yuan.

Since TV sets use little metal - metal can be salvaged and sold - they are the cheapest among the appliances, says James Ju, another used appliance dealer in the market.

Metal from an AC can sell for several hundred yuan, but lack of metal in a TV makes a set cheap.

That low price is the magnet, however, and someone buying an old set for 60 yuan can really get a good deal, counting 20 yuan in transport expenses.

A customer could then buy a new 4,000-yuan TV set, applying the consumer credit for the recycled set. A saving of 340 yuan, at least.

It makes business tough in the market for used appliances.

"We used to be able to collect at least five to six old TV sets a day, but now we collect two at most, sometimes none," says Zhong.