iPhone Trade-In Program
Indeed, the Wall Street Journal reported that Apple is paying up to $280.00 for a used iPhone 5 through their in-store program. However, if you can accept uncertainty and delay gratification, you can take advantage of Apple's mail-in program through PowerOn which claims it will pay up to $400.00... Of course, the operative words here are "up to".
Gazelle offers gadget recycling, and claims that it pays a premium over the Apple in-store program and potentially the PowerOn program. While I haven't used Gazelle, I did recycle a 16GB iPhone 3G at an EcoATM about a month ago and they paid me more than the $10.00 Gazelle is offering today for the same phone... However, the EcoATM experience was like "Bizarro Apple Store" i.e. more akin to being at a low end pawn shop when the EcoATM spit out the $15.00 for the old iPhone 3G.
Go Prepaid with "Straight Talk"
You'll pay a lot more by amortizing the cost of your iPhone over two years through a contract with the major carriers AT&T or Verizon.
You don't need to go with a contract service with AT&T or Verizon when you can buy a new 16GB iPhone 5 from Straight Talk for around $650.00 and pay $45.00 a month for prepaid talk time and unlimited data. You can also get a reconditioned 16GB iPhone 5 for $500, or if you don't need the new iPhone, you can get a brand new iPhone 4S for $550.00.
At the end of two years, by purchasing your phone outright, like you would an iPod, or iMac, etc. you would save $870 compared to Verizon ($200 for iPhone plus 2GB data and $100/month) and save $1020 by leaving AT&T ($200 for iPhone plus 4GB data and $110/month).
Best case scenario, if you've got a late model iPhone and are up for a trade-in, you'll save over $1,000 by applying these two strategies.
That's a lot of dry cleaning!