Recycle something
Drop or throw an item into the open top and wait for the crush. Pieces roll out of the chute onto the tray in front. You never get back as much as went in.
What comes back
Copper and iron come back as scrap, which the Smelter melts into ingots again. Gold comes back as nuggets. Anything you have crafted can go in, even a Hollow's wooden sword, and its raw materials roll back out.