Matthew Panzarino reports that employees at some Apple retail stores are already offering a trade-in credit to users who come in with working iPhones, looking to buy a new one (not just trade it in for store credit). Customers are said to be getting between $120 - $200 for working iPhone 4 and 4S models. That's comparable to what a customer would get trading the phone in through a third-party service like Gazelle.com.
As Rene pointed out, iPhone is Apple's biggest money maker so it only makes sense that the company would try to keep that money in house instead of out the door. Apple's already doing pretty well with customer retention compared to, say, Samsung, and a trade-in program would do nothing but increase it.
If this is successful, do you think Apple would expand the program to include other iOS devices like iPads and iPod touches? Or Macs?