<p>Escalating environmental pollution and resource waste from end-of-life (EOL) products have prompted governments to implement “trade old for new” (TON) and “trade old for cash” (TOC) subsidies to stimulate consumer participation in recycling. To examine the TOC subsidy’s implementation prerequisites and effects, this study builds two theoretical models: one with only the TON subsidy and another with both TON and TOC subsidies incorporated. The results show that a government maximizing its own benefit implements the TOC subsidy only for highly durable used products. By contrast, a social welfare-maximizing government always offers the TOC subsidy regardless of product durability. In the latter case, when product durability is relatively low, maintaining a constant gap between the TON and TOC subsidy amounts can achieve maximum social welfare. This study further reveals that implementing the TOC subsidy not only avoids negatively impacting the existing TON program but also enhances profits for the manufacturer and recycler. However, under budgetary constraints, the government consistently prioritizes allocating subsidies to the TON program. Our results offer management insights for governments to optimize subsidy strategies within hybrid recycling frameworks.</p>