By Simon Hill, dealnews contributor Anyone on the hunt for cheap gadgets will have come across refurbished electronics at some point. Available at knock-down prices, "refurbs" are often stigmatized as merely faulty rejects. But in fact, many devices are repaired, reconditioned, and retested to be as good as new. Yet, beyond checking for dents and functionality, how can consumers know a refurb won't fail a second time? To ensure the best possible refurbished product, it's important to verify that merchants who sell refurbs conduct rigorous testing on their products and have a good reputation in general. It's also smart to look for a warranty. What "Refurbished" Really Means There tends to be a lot of confusion about "refurbished" electronics. Devices can be returned for a whole host of reasons and the bottom line is the consumer can't know why something was returned. In the best case — and most rare — scenario, the original owner has returned the product unopened without even using it. And because no electronic devices that have been sold and returned can be re-sold as new again, all unopened, in-box devices receive the "refurbished" marking. However, for the most part, devices are returned for one of the following reasons: Cosmetic damage: If the device was damaged during shipping and has dent or a scratch, the original buyer is perfectly entitled to return it and expect a brand new replacement. Visible defect: If the buyer notices an extremely minor issue like a dead pixel, or major a fault, like a broken optical drive, he's entitled to return it for a new one. Open box: Whether it was a display model or someone opened it for another reason, once that any original packaging has been opened, it cannot be sold as new, even although the device may not have even been used. Recalled product: In the event of a recall, the device may have been sitting on a retailer's shelf, but the manufacturer identified a common fault in a batch to be repaired. The Benefits of Buying Refurbished Electronics There are several potential benefits to buying refurbished electronics, the most obvious of which is their discounted price. Customers can typically save between 10% and 30% on refurbished goods, but sometimes electronics are discounted by as much as 50%. But, refurbs are not just about the monetary savings. Jerry Jackson, Managing Editor of the Technology Guide notes that beyond cost-saving, "the refurbished product actually goes through a higher level of quality control." As such, brand new products may actually represent a greater risk to the consumer. "When a product is being initially manufactured, usually at a large facility overseas, it's largely a matter of how many units can be fabricated per day and a question of how many of these can be produced in a given shift. When it comes to a refurbished product, it's less a matter of quantity per day and more a matter of making sure it's done right." The last thing any manufacturer wants for a product to be returned a second time. Choosing the Right Brands and Retailers There is an important caveat in securing great refurbished electronics deals: Shoppers must be careful where they buy from. While a survey by the Consumer Electronics Association reports that 89% of resellers tested a returned product before selling as refurbished; 84% repaired it and cleaned it; and over 50% upgraded any internal hardware or software, it's essential to conduct a thorough investigation of any manufacturer's process for refurbishment, and weigh any warranty offered. Another key to purchasing worry-free refurbished electronics is make sure the merchant's return policy for refurbished goods is clear. As with new items, it's best to purchase from a retailer that offers refunds should the product not be satisfactory. An "all sales are final" policy is best avoided. Some of the big names in consumer electronics who repackage refurbished products that have undergone rigorous testing standards, and offer limited 1-year warranties include Apple, Sony, Dell, and Amazon. And, in addition to its refurbished Kindle range, Amazon's Warehouse Deals are also popular for finding bargains on a wider range of returned products. Both newegg and Best Buy also offer an assortment of refurbished electronics, from computers to digital cameras and beyond. However, manufacturer warranties and return policies vary. While there is an element of risk involved in purchasing refurbished products, these tips should help all consumers make the most of open box or pre-owned goods. Folks in the market for discounted second-hand electronics are even in good company: Apple reminds consumers on its website that "Refurbished supply is usually very limited," and they often run out of refurbished inventory." And remember, before buying refurbished it always pays to price check potential purchases against the latest deals! Front page photo credit: Lifehacker Photo credits top to bottom: Go Lo and Mod My i Related dealnews Features: Out with the Old, In with the New: Reuse, Recycle, and Cash-in Old Electronics War of the Warranties: AppleCare vs. SquareTrade Nordstrom Rack's Latest Sales Strategy: Selling "Refurbished" Shoes? Follow @dealnews on Twitter for the latest roundups, price trend info, and stories. You can also sign up for an email alert for all dealnews features.