According to a survey from a firm that buys second-hand mobile phones, about 50% of users are missing out on up to £200 in cash for old phones.
According to the study, 23% of respondents threw old mobile phones away and 28% kept them.
More than 90% said they would recycle their old phones for cash.
Mark Harrison, director at Fonebank, said: with a recession and Christmas imminent, trading in old phones made more sense than ever.
"It's crazy that a lot of people out there are still just chucking their phones in the bin when they no longer have any use for them," said Mark Harrison, Director of Fonebank. "Not only is this bad news for the environment, it's also throwing money away. Most people are amazed to discover that their old phone can easily be recycled for cash."
He said depending on the make and model an old handset could be worth up to £200.
A total of 53% of those surveyed said they knew that throwing phones away was bad for the environment. Another 42% did not, and 5% hadn't thought about it.
The report found that 34% of people owned one unused mobile phone, 36% owned two, and 19% owned three or more.