The present invention relates to an apparatus and method for a drop indicator having a magnet installed therein. The drop indicator according to the invention is used to determine whether a product has ever been dropped or impacted, either in delivery or in use, by inspecting changes in the original condition of the magnet caused by the interaction between the magnetic force and the acceleration of gravity, inertia force, and colliding force, etc. generated upon collision. Take a cell phone or a PDA, for example, changes in the indicative material of the drop indicator will help decide whether the faulty product has ever been dropped or impacted in delivery or in use, so that liability can be determined.