Basically, when you buy your phone, you pay $30 upfront, and that gives your phone a value. The value starts off high, and slowly lowers with time. When I bought mine, If I was to ride out the entire contract, then the phone buy back value is $140. Which means if I wanted a new $200 phone at contract time, I would only need another $60 to get it. You can sell it earlier though and get more money for it if you choose. That's the basic rundown.