I did this once, three years ago for a digital camera (return protection). They had me mail the camera to them. However I asked the lady on the phone what they did with it, but she wouldn't tell me. However I looked up the name/address they had me mail it to, and it was some company that sells items on ebay (its been so long now I forget the name).
I filed my 2nd return protection this week. I did it online, but this one was different because they credited my account already, and haven't asked me to send it to them, yet anyways. You would think they would want it to resell.
Hopefully people won't abuse this, because its a great service they offer. Its the main reason I use their card over Visa.
I don't expect to get anything free out of it, I just like being able to return it if the store won't let me.