What is it:
Addition or upgrade to Gem Hearth. Call it whatever you want, the 'Recycler' sounds tacky.
What does it do:
'Recycles' heroic and rare equipment into Arcane Shards (or fusion powder, or gems)
Why:
So much gear is bound, HC has its reasons, but it makes so there is not much market for anything but very end game gear and gems, and vanity things. Allowing gear to be recycled directly into Arcane Shards, in addition to being sold for gold, gives newer players the opportunity to upgrade gems. A part of this game that for the most part is reserved for when you have nothing else to do. Also, would help newer players break into other aspects of the game that need gems (such as PvP), as well as provide everyone additional ways to trade with fellow players, instead of dumping everything into an NPC.
Logistics:
As a starting point for discussion, have all level 40 and lower heroic or rare equipment be recyclable into small arcane shards, while 41+ heroic and rare items have a chance to be recycled into normal Arcane shards or small one, and/or with possible rare chance for large, if the feature gets moving enough.
Some randomness would need be factored in, also with chance for more shards depending on item level.
A 'consolation' prize of FP could be considered, if no shards are recovered from recycling, or gold could also fit the profile (although at a reduced rate from what you would NPC something at).
There's possibilities for other items to be included in recycling, or in reward, just having this here as a starting point.
TL/DR:
Have a feature that gives arcane shards and/or fusion powder and/or other item for equipment, instead of selling to NPC for gold. Place this feature near the gem hearths.
