Recycling e-waste is practiced both formally and informally.

Proper or formal e-waste recycling usually involves disassembling the electronics, separating and categorizing the contents by material and cleaning them.

Items are then shredded mechanically for further sorting with advanced separation technologies. Companies must adhere to health and safety rules and use pollution-control technologies that reduce the health and environmental hazards of handling e-waste. All this makes formal recycling expensive. As a result, many companies and countries illegally export their e-waste to developing countries where recycling is cheap.

The U.S., the second largest producer of e-waste after China, produced 10 million tons of e-waste in 2012, over 64 pounds per person. In 2012 (EPA data for more recent years are not yet available), only 29 percent of this was recycled—the rest is usually landfilled, incinerated or stuck in a closet. A study done by the watchdog group Basel Action Network using trackers, however, found that 40 percent of the e-waste supposedly recycled in the U.S. was actually exported. Most of it ended up in developing countries—usually in Asia—where informal recycling is typically unlicensed and unregulated.At these informal recycling workshops, men, women and children recover valuable materials by burning devices to melt away non-valuable materials, using mercury and acids to recover gold, and dismantling devices by hand to reclaim other materials of value.

Usually they do not wear protective equipment and lack any awareness that they are handling dangerous materials. Research has found that inhaling toxic chemicals and direct contact with hazardous e-waste materials (even in some formal e-waste recycling settings) result in increases in spontaneous abortions, stillbirths, premature births, reduced birth weights, mutations, congenital malformations, abnormal thyroid function, increased lead levels in blood, decreased lung function, and neurobehavioral disturbances. Moreover, e-waste toxins contaminate the air, soil and groundwater.

In the face of these health and environmental hazards, however, many people in developing countries earn a living by dismantling, refurbishing, repairing and reselling used electronic devices. Guiyu, China is often considered the e-waste capital of the world, with 75 percent of households involved in the recycling business. Informal recycling is also practiced in India, Nigeria, Ghana and the Philippines.

In addition to its health hazards, informal recycling can pose security risks, because while formal recyclers in the U.S. usually require wiping devices clean of data, informal recycling does not.

Criminals search e-waste for credit card numbers and other financial information. For example, government contracts and lucrative agreements with the U.S. Defense Intelligence Agency, the Transportation Security Administration and Homeland Security have been found on hard drives in Agbogbloshie, an e-waste center in Ghana.

Wealthy countries send about 23 percent of their e-waste to developing countries each year. This is ongoing despite the fact that the European Union and 186 states have ratified the Basel Convention, which works to minimize the transfer of hazardous waste from developed countries to developing countries. The U.S, the only developed country that has not ratified the Basel Convention, has agreements that allow it to ship hazardous waste to developing countries.