Apple has partnered with California-based PowerON for its recently-expanded recycling service, calling the company "an industry leader in the responsible reuse and recycling of used IT assets."
To return an iPhone, users must first choose which model they have and then answer a few simple questions about the state of the device, including whether it is severely scratched, water damaged, and if it works properly. PowerON provides free shipping materials and, upon receipt and verification of the device, mails out an Apple Gift Card for the fair market value of the product -- or approximately what it would be worth selling it privately.
Apple/PowerOn isn't the only way to dispose of old electronics, of course. Online trade-in services like Gazelle, selling devices on eBay or Craigslist, or trading in iOS devices at GameStop are all viable alternatives.
Understandably, some may prefer the official Apple path versus the hassle or risk of selling their devices to third-parties.
The trade-in service isn't the only useful recycling program that Apple offers. It also gives a 10% discount on a new iPod to customers who bring in an old iPod -- working or not -- to an Apple Retail Store for recycling. Retail Stores will also take in dead batteries and any cell phone for free recycling as well.
In recent years, Apple has worked to aggressively improve its environmental image.