Salvage Bag
The Salvage Bag was added during Publish 48 on November 27, 2007. It is a comprehensive recyclying system that will help players turn finished products back into raw materials such as Ingots, Cloth and Leather. The bag can be purchased from a Provisioner for around 1,000 gold.
Using
Place a Salvage bag in your backpack and fill it with all the items you wish to recycle. Once full, open a Contextual Menu on the bag itself and select the appropriate option (Ingots, Cloth, or All). The items will be turned back into raw materials with a system message informing you how many items were recycled.