(MONEY Magazine) – Recently I got an e-mail suggesting that I put "refurbished" Callaway golf clubs on my holiday shopping list. "Refurbished?" I wondered. "Callaway?" Refurbished computers and cell phones, okay. But Great Big Bertha II and its upscale Callaway cousins? There's something jarring about seeing "refurbished" and "Callaway" on the same page, let alone in the same sentence.

So I did a little digging and found that today consumers have three choices, whether they're buying small appliances or golf clubs. There's new. There's used. And now there's a $50 billion to $60 billion industry in merchandise that has been remanufactured, reconditioned, remodeled or refurbished.

That so many terms are used interchangeably is just the start of the confusion. As David Arron, senior category manager of consumer electronics at Amazon.com, explains, what any of these terms means in practice varies from one item to the next. But the potential for savings is real. A Dell Inspiron 300m notebook computer for $1,829 new, $1,659 refurbished, a 10% savings, at Dell.com. A KitchenAid Five Speed Ultra Power Blender for $100 new, $70 refurbished (the largest selection is at Kitchencollection.com). And at Callawaygolfpreowned.com, a 2000 Big Bertha Hawk Eye VFT Titanium driver that was originally $300 in "like new" condition for $160.

If you're thinking about doing some holiday shopping from this new retail category, here's what you need to know.

--WHAT DOES REFURBISHED MEAN? Most refurbished products have been sold, lightly used or not used at all, then returned. "Once an item is opened, it can't legally be sold as new," says Amazon.com's Arron. Often returns are sent back to the manufacturer to be overhauled. But sometimes a merchant's contract with the manufacturer doesn't allow returns--or allows only so many. In that case the merchandise may go to a company known as a "refurb house," which cleans the items, checks them out and packs them in new boxes--often plain brown or white--with manuals and accessories.

--DOES IT MATTER WHO DOES THE OVERHAUL? Maybe. Some refurb houses don't put a product through as detailed an inspection as manufacturers do. But some manufacturers--Compaq is one--don't want to be in the refurb business, so they certify third parties to do it for them. The true test of quality is whether the warranty (often lasting about half as long as new products' warranties) comes from the manufacturer. If you're not sure what you're getting, find the serial number and call the manufacturer to be sure it will stand behind the product. Then, suggests Edgar Dworsky, editor of ConsumerWorld.org, if you have a gold or platinum Visa card, use it to make your purchase. Until March 1, 2004, premium Visa cards will double manufacturer-certified warranties; after that date, check with the issuer. (Other credit cards don't extend this offer.)

--ARE THERE SOME GOODS THAT YOU SHOULDN'T BUY REFURBISHED? Many cell-phone manufacturers don't believe it's worthwhile to refurbish their own phones for resale, says Nichole Carr of TheWirelessSource.com. That's a good sign that it's probably not worth it to you either--especially with new models like the Sony Ericsson T616 going for $50 with a contract and an instant rebate. (Many manufacturers have phones refurbished, then give them to charity.)

--FINALLY, WHAT'S THE ETIQUETTE? Is it okay to give a refurbished product as a gift? Personally, I could see opening a plain brown box containing, say, a souped-up notebook (hint, hint) with delight. But I decided to ask Amy Dickinson, who recently stepped into Ann Landers' shoes. Here's what Dickinson--who says her family has regifting parties--has to say: "I think it's wonderful. It probably enables people to get more gift for the money. Who wouldn't appreciate that?"

Editor-at-large Jean Chatzky appears regularly on NBC's Today. Contact her by e-mail at moneytalk@moneymail.com.