What is planned obsolescence?

Have you ever had a gadget break that was more expensive to repair than replace? Or wanted a new version of something you already own just because the old one is a bit—well, old?

Your experience may be the result of planned obsolescence. It can take different forms, but in general it happens when a product becomes useless or out of date sooner than expected. It can mean that you end up having to spend more money replacing a product that could have had more life in it.

Keep reading to find out what planned obsolescence is, its drawbacks and benefits, and how to reduce or avoid any negative encounters with it.

Key takeaways

• Planned obsolescence happens when manufacturers design products to have an artificially shortened life.
• Planned obsolescence is a known business strategy that can have pros and cons for consumers, businesses and the environment.
• Examples of planned obsolescence include functional, perceived and systemic obsolescence.
• It’s hard to avoid planned obsolescence altogether, but there may be some things you can do as a consumer to reduce its negative effects.

“Obsolescence” comes from the word “obsolete,” which means no longer in use, no longer useful or old-fashioned. Planned obsolescence is the business practice of designing products to become obsolete earlier than they might naturally. 

If you think that sounds sketchy, you might be right. But the nonprofit Property and Environment Research Center (PERC) says there can be good and bad types. Planned obsolescence can mean goods and services are being constantly improved. But it can also force consumers to spend more money on replacements for things they already own.

The answer to why planned obsolescence exists might depend on who you ask. Take this example of one of the earliest-identified instances of planned obsolescence.

In the 1920s, a group of light bulb manufacturers got together and agreed to artificially limit the lifespan of their products from about 2,500 hours to about 1,000 hours. 

Why would they do that? Some of the manufacturers argued that their shorter-life bulbs were of a higher quality and burned more brightly, which was a benefit to the consumer. Another view is that the group made the bulbs less durable to increase demand and make more money for their companies.

Here are some other reasons for the existence of planned obsolescence:

• To improve a product’s design: To make a cellphone lighter, a manufacturer might use lower-quality materials—glue instead of screws, for example.
• To encourage growth: A faster turnover of products could boost the economy, promote innovation, create jobs or improve the quality of products.
• To meet customer needs: Not every product needs to be built to last—think children’s clothes that quickly become too small. In these cases, a cheaper product might be more important than durability.

Here are some common types of planned obsolescence:  

Functional obsolescence

Functional obsolescence happens when a newer and better product succeeds an older product in the marketplace—the car replacing the horse and buggy, for example. In general the change benefits the consumer, resulting in a superior product that might save them time or effort. 

Other forms of functional obsolescence might seem to benefit the manufacturer more:

• Prevention of repair: When repair instructions or replacement parts and tools are made unavailable; warranties restrict who’s authorized to make repairs; repairs cost more than replacement products; or components are glued into the product.
• Contrived durability: When materials or parts with a known limited lifespan are used to prematurely end a product’s life, like a light bulb built to burn out after 1,000 hours.  
• Systemic obsolescence: When software is updated and becomes incompatible with existing hardware, like a new app that won’t run on an older phone.

Value engineering

Value engineering, also known as value analysis, is all about efficiency. It aims to keep production costs relative to the product’s expected lifespan—for example, using cheaper materials if a product is expected to become obsolete in a year or two. PERC labels this a “good” type of planned obsolescence, because it helps keep the product’s price on a par with what it’s worth to the consumer.

Perceived obsolescence

With perceived obsolescence, the product might not stop working at all, or even get clunky. Instead, planned obsolescence might happen when an existing product comes out in a new color or new design. The consumer is attracted to the “new and improved” version, and the existing product becomes less valuable and desirable to them. Perceived—or psychological—obsolescence happens a lot in the fashion, car and tech industries. 

For manufacturers, planned obsolescence is generally a good thing. It results in consumers buying more, and that means more revenue. But in other areas, the impact of planned obsolescence can be more mixed. And in the case of the environment, it can be hard to see any positives at all. Here’s a brief overview of some potential impacts:

• Consumers: On one hand, stylistic and functional advances can make products smaller, lighter, faster and cooler. And value engineering ensures products aren’t “overbuilt” and are therefore affordable given their expected lifespan. On the other hand, it can be expensive and frustrating to replace old products with new ones. There might be physical or legal barriers to choosing repair over replacement.
• The environment: Higher production levels could contribute to the depletion of natural resources. And increased consumption generally leads to more waste. According to a 2021 FTC report, Americans throw away 416,000 cellphones a day. More waste can lead to greater pollution and more toxic elements like lead, mercury and cadmium ending up in landfills.
• The economy: On one hand, the rapid turnover of goods can power the economy and create jobs. And the continuous introduction of new technologies can spur innovation and improve product quality. On the other hand, it can encourage a culture of disposable goods and careless consumption.

As a consumer, it’s probably difficult to completely avoid planned obsolescence. But there might be some things you can do to help minimize the negatives:

Support sustainable brands 

These days, lots of brands are making an effort to be more sustainable. For example, Target has set a goal to use 100% recycled, regenerative or sustainably sourced raw materials in its products by 2030. And Ikea has a buyback scheme that gives a second life to old items customers no longer want.

Buy durable products

Some products are still built to last. Savvy shoppers can look for timeless designs, durable materials and goods with modular parts that can be switched out if they fail. Brands that offer lifetime warranties include Jansport, Eddie Bauer, Osprey, Zippo and L.L.Bean. You can also check out Buy Me Once, a website helping consumers identify and buy quality products.

Shop secondhand

You can save money and keep waste out of the landfills when you buy anything previously owned, from cars to clothes. Ebay and Etsy are two of the biggest online marketplaces for secondhand items. It’s worth looking into what individual brands are doing, too. Patagonia and H&M, for example, offer programs where you can return your old clothing for resale or recycling.

Repair, don’t replace

Right to Repair is an international movement of advocacy groups pushing for laws that would give consumers greater ability to repair their products. Right-to-repair laws are currently being considered in about half of the U.S. states. You can find out more about Right to Repair or contact your state representatives.

You might also be able to tap into the growing DIY repair movement. For example, iFixit—“a global repair community of people helping each other fix their stuff”—has thousands of repair manuals on its site. And Repair Cafes let you bring broken items in to have a specialist fix them or learn how to do it yourself.

As a consumer, it’s difficult to avoid planned obsolescence. But it helps to be aware of it because it can affect your spending habits. And there are things you can do to help minimize its impact.

For tips on how to avoid overspending and other steps you can take to manage your money more effectively, check out these 7 money management tips.