Q: If i recycle my iPod touch 5th generation by taking it to the apple store then does it mean that i can get a new iPod touch

     The Renew and Recycling Program with Apple does not work this way! Here is links that may help you get more information about the program! http://www.apple.com/recycling/

     Only certain qualified iPhones are eligible for a trade up or an in store credit! Check out http://www.apple.com/iphone/trade-in/

Last time I looked they gave you nothing for an iPod. You may be money ahead just to sell it. Or places like Best Buy will give you store credit.  Was able to trade in my 32 gig iPod 5 for $57 that I could use towards the purchase of my 6th gen, so you may want to look into that. If you're in the US, amazon also gives store credit for devices. And they do have online estimators.

You will need to remove it from your Apple ID, there are instruction befow, so you dont' accidentally sell someone a brick

What to do before selling or giving away your iPhone, iPad, or iPod touch - Apple Support