If you swap out a phone for repair, it will most likely be for another "refurbished" unit unless you are JUST buying it. read more
Apple refurbishes returned items from iPhones to Macs. The device may have been returned for a warranty repair or may simply have been returned due to personal customer preference. read more
The point at issue is how much it has cost Foxconn to deal with iPhones that Apple sent back to it. They were sent back for being mismanufactured in some manner. My colleagues at The Register have a go at it: Foxconn has apparently botched a batch of iPhones, which Apple returned to the contract manufacturer because they were not fit for sale. read more