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Cuz they take the gold out of it and sell it for more
No they dont, they re-sell the refurbs.
Change the screen and back, good to go for a refurb. Its a genius idea, really.
They give you cents in comparison for what you could sell it yourself for on Kijiji or some other listing website. In those cases you would get it as cash not credit as well.
It also boost's sales of the new iphone :P