Joining AT&T, which already offers a similar program, Best Buy has begun selling refurbished versions of the iPhone 3G, priced $50 less at $149 for 8GB and $249 for 16GB. The phones are ones that were returned within the first 30 days of ownership, the retailer says, and remain eligible as an upgrade option for owners of first-gen iPhones. A fresh, two-year AT&T contract is still required with a purchase.

Reuters observes that Best Buy may need the option in order to fend off Walmart. Aside from undercutting the former's prices in general, Walmart also began selling the iPhone recently, at prices $2 less than the standard $199 and $299 maintained by Best Buy, AT&T and Apple itself. It is unclear if and when Walmart might contemplate selling used models.