Does the equipment belong to the user or is it still owned by the company? That's what would matter here I think. There should be legal mentions in the user's manual?
If the user owns it, then I guess they can do whatever they want with it once they have no use for it anymore, except, sure, just throw it away with normal trash, but just like any other electronic device.
The company probably has a procedure for handling returns and properly having them recycled as per the law, but the user can probably keep it otherwise and it becomes their own responsability to properly dispose of the device. If the company said to toss it away, I don't see a single reason why you should even bother returning it if you have any use for it. Just handle it as any other electronic equipment.