iPhone 5 (three-up, profile, front, back, black and white)

In another sign that Best Buy could be clearing stock (or simply enticing customers to pick up an Apple handset), CNET reports the retailer will trade-in your working iPhone 4 or iPhone 4S on Sunday for a $150 credit, which can be redeemed against the purchase of a new iPhone. Given that Best Buy normally sells the entry-level iPhone 5 on a two-year contract for $150, the promotion lets you trade-in your old iPhone and purchase Apple’s latest and greatest handset without paying a dime – of course, excluding the obligatory carrier activation fee and any applicable sales tax…

According to CNET, you must be eligible for an upgrade and activate your iPhone 5 on a two-year contract with Verizon, AT&T or Sprint to take advantage of the offer.

The deal wasn’t available online at post time.

As Dan DeSilva points out over at 9to5Mac, it may not be your best bet as other places offer even deeper discounts. For example, Gazelle will pay $215 for your 64GB AT&T iPhone 4S in good condition, $75 more compared to Best Buy.

And in some cases, DeSilva notes, “Amazon will pay upwards of $300 for an iPhone 4S”.

Best Buy, an important Apple distributor, recently partnered with Samsung on so-called Experience Shops, basically the store-within-a-store concept rolling out to 1,400 Best Buy locations.

Last week, AllThingsD reported that Best Buy is shaving $50 off every iPhone sold through June 29.