Yes. Take it back! Wait for the 5S.
Well, the sad part is, he can return the iPhone 5 he just got, but he won't be able to get his 4S back.
As for selling your old iPhone:
You can always get more money from Ebay for selling your old device, but it comes with a risk. I sold my 3GS to a guy in Venezuela, and at some point, the package was stolen and it was never delivered. I had to refund the buyer. If you sell your iPhone on eBay, GET SHIPPING INSURANCE. I still smack myself everyday.