[lazyier]

More conventionally this is called a "Core Deposit".

The idea is that you are buying new or refurbished products to replace broken parts. So you pay a core fee so you return the broken parts so that they can rebuild them and resell them.

This is common for automparts stores because as long as the cast metal parts are not damaged and within spec then there is no reason they can't be rebuilt. Alternators, water pumps, etc.

You are not obligated to return the parts. You can keep them yourself and if that is the case then they just keep the deposit.

[alimov]

I believe they do a fair bit of recycling to recover various metals. I don’t think its all fixed up and resold (if any of it is fixed and resold at all)

[mike_d]

Auto parts stores depend heavily on refurbishing cores. Only the most damaged units go to scrap.

You will lose a ton of money trying to buy a 15 year supply of starters and keeping them in a warehouse for 20 years (remember your sales only start once a car is out of warranty/production).

Car parts tend to fail in waves, so all the water pumps from 2012 Volkswagens are going to start coming in - and getting remanufactured - around the same time people are looking for them. You just buy a few from the OEM to bootstrap.

[simonh]

I very much doubt the old parts are re-used. Refurbished Apple devices all have brand new screens and batteries installed, even if they were as-new returns.