While Wal-Mart's latest quarter showed same-store sales declined at a mid-single-digit percentage rate in the overall entertainment category, wireless sales were again a standout sub-category. NPD said the retailer gained more than 350 basis points in unit share, securing it as the number one handset retailer in unit share for the quarter.
Bratspies said the trade-in program is part of Wal-Mart's strategy to continue to expand its wireless business. "For the last six, three-month increments, we have taken share in the [wireless] category each time…It continues to perform and we are going to continue to drive that business," he said.
Wal-Mart won't directly re-sell the used smartphones, but will ship the used phones to its partner CE Exchange. CE Exchange will either refurbish or recycle the traded-in smartphones. Because CE Exchange has a 100-percent recycle guarantee program, every part of the phone will be recycled.
(Read more: Wearable tech: what's next?)
As a result of this partnership, Wal-Mart said the smartphone trade-in program aligns with the retailer's sustainability goals, because it helps to responsibly recycle smartphones.
The retailer already accepts trade-ins for other electronics like MP3 players, video games, cameras, laptops and more with its "gadgets to gift cards" program.
Trade-in wars
Although the discount retailer isn't the first player to introduce a program for smartphone trade-ins, its behemoth size and scope is likely to make it a major player in the trade-in wars. Smartphone carriers, including Verizon, AT&T, Apple, and others offer trade-in programs—all are hoping to secure the sale when consumers upgrade to the next-generation device.
Apple launched its trade-in program in August. Consumers can bring in old iPhones at U.S. Apple stores for credit towards a new model.
(Read more: Apple's iPhone trade-in program to add consumer choice)
Online marketplace site eBay recently launched is "My Gadgets" website, which encourages consumers to track their electronics' value at any time to determine when the best time is to sell the device on eBay. Once the user clicks the "sell now" button, a listing is quickly created and available for eBay's 120 million active users to begin the bidding. EBay's "My Gadgets" program isn't truly a trade-in program, as eBay sellers can use the cash received for the old device for anything, not just a credit towards a new phone.
"If we look back a month ago today, at the number of listings we had for iPhone 5's, we can say that we have seen a 44 percent uptick in the number of iPhone 5's for sale on the platform," said Jeff Somers, vice president of eBay North America marketplaces. "[Consumers] are getting their items ready for sale on eBay so that they can trade-up or take advantage of new opportunities to move into a new phone by selling their phone on eBay."
An iPhone 5 is selling on eBay for an average price of $430, said Somers. Wal-Mart said the best conditioned iPhone 5 will be worth $300 trade-in credit.
Since the Apple iPhone or Samsung Galaxy smartphones are the same no matter where they are purchased, the trade-in programs will likely need to remain as competitive as the prices for the new devices.
May the best trade-in value win.