How to "Erase all Contents and settings" from iPhone4

We are trying to "Erase all Contents and Settings" from our daughter's iPhone4 which she has given to us after getting a newer model.

We plug the iPhone4 into our computer via Tunes, and go through the prompts until we get to the "Erase" button, but when we hit that we get a message that the

phone is not connected to the internet. We do not have WiFi.