I doubt anyone has ever really wondered what happens to the stuff you either trade in or sell at Game Stop for about 1/3 of the price you originally paid for. (or +30% if you are a rewards member, excluding hardware)
BUT in case your that one person that did wonder, well wonder no more. Kotaku has posted such information, so now, maybe YOU can sleep a little more soundly at night.
http://kotaku.com/5932029/see-what-actually-happens-to-your-dirty-broken-pre+owned-video-games