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Amazon offering top dollar for iPhone trade-ins

For example, get up to $455 for a mint-condition iPhone 4S 32GB. Just one catch: you're getting that in Amazon dollars, not actual cash.

Amazon promises pretty good money for your used iPhone -- except that you'll have to take it in gift card form.
Amazon promises pretty good money for your used iPhone -- except that you'll have to take it in gift card form. Screenshot by Rick Broida/CNET

Planning to upgrade your iPhone to whatever model Apple announces next month? Amazon wants to make it worth your while.

As of today, the company is offering some of the highest trade-in values I've seen on used iPhones. The only catch? Your payout comes in the form of an Amazon gift card, not actual cash.

Amazon is accepting used, fully functional iPhones from AT&T, Sprint, and Verizon. As with most trade-in services, you must specify whether your model is in acceptable, good, or like-new condition. That dictates the amount you'll get in return.

For example, my AT&T iPhone 4S 32GB is in perfect working order, with no visible signs of use and all the original materials included (earbuds, sync cable, box, etc.). What's more, I haven't personalized it in any way (i.e. engraving). Assuming Amazon agrees with my assessment, I'll get a gift card worth $455. If the iPhone was merely in "good" shape, with normal signs of wear (including light scratches on the body), I'd get $386.75.

Another example: a Sprint iPhone 4 8GB fetches up to $230 if it's like new, $195.50 if it's good, and $69 if it's merely "acceptable." (Note to self: Make sure to keep your iPhone 5 in mint condition for future resale possibilities.)

By way of comparison, popular trade-in service Gazelle offers $320 for a "flawless" AT&T iPhone 4S 32GB, and $300 for a "good" one. A Sprint iPhone 4 8GB will get you $150, max.

Of course, those are cash payouts, and Gazelle now offers a price-lock guarantee -- meaning if you accept their trade-in offer now, you don't have to actually mail in your iPhone until October 1.

If you opt for Amazon's deal, you'll need to send your iPhone immediately. You can wait until after Apple's announcement, of course, but by then the trade-in values will likely have dropped.

And therein lies the gamble: get more by trading in now, or wait a few weeks and end up with a lower buyout. Personally, I'd opt for the former if I could be assured of keeping my phone number -- but I don't see any way to make that work.

It's worth noting that you can always use your Amazon credit to buy your new iPhone -- and possibly even end up ahead, depending on the price of the new model, the trade-in value of the old one, and how much time (if any) is left on your current contract. I've managed that feat with my last couple iPhone upgrades.

You could also sell that gift card for cash. Even if you have to offer it at a slight discount, you could walk away with more than you'd get from another trade-in service. Food for thought.

Are you planning to upgrade your iPhone? If so, what do you think of Amazon's deal? Share your trade-in/trade-up thoughts in the comments.