Retailer Game and its subsidiary Gamestation will no longer sell second hand the Core, Arcade or 20GB non-HDMI models of the Xbox 360 console.
A Game spokesperson told Eurogamer the decision was based on falling demand for the Microsoft hardware, but an internal Gamestation memo acquired by Eurogamer suggested otherwise.
"As of Saturday 3rd September we will not be selling Pre-owned Xbox 360 Cores, Arcades and 20GB non HDMIs. This is due to the high failure rate of the console and the difficulty and cost of repairing them."
"We will continue to trade these consoles in but they will need to be sent back to the DC as a regular faulty return where they will exit the business."
Microsoft has struggled with the consoles notorious "red ring of death," and in 2007 extended its warranty programme for the machine by three years.
In July financial reports revealed that sales of the Xbox 360 console rose, with the company shipping shipped 13.7 million units during the year.