Refurbished stock has been returned to Apple for a variety of reasons. This can included products that were delivered to a customer and returned them unused.
People tend to go for Apple Refurbs for the following:
a) Lower cost.
b) Products are tested before being sent, regardless of why they were returned.
c) The specs can be better than advertised.
With regards to the second, refurbished models also come with the standard warranty – so if it’s been tested before being sent, you’re (in theory) less likely to receive a lemon and if anything does go wrong in the first year, you’re covered. From various discussions here, this reason is a key one for many.
With the third point, this was something I used to see people mentioning more but I’m pretty sure recently I read one or two people say this. Going from memory, but the improvements are pretty modest (e.g. more RAM than specified) but obviously welcome – rather like reports about people returning a faulty machine and getting back a larger hard drive. Again, going from memory, but I do recall people citing this as one reason to go with refurbished more than they tend to these days. Testing information can be found at
http://store.apple.com/Catalog/US/Images/apple_certified.html.
With regards to physical condition, under the T&Cs, “cosmic imperfections” are not included under the warranty – scratches and marks would come under this. Going from punter feedback, I would say that the chances of getting a product in mint condition or incredibly close is high. However, if you really, really don’t want a machine that might be marked or scuffed in some way and this is an important buying decision, look elsewhere.
There have been many refurbished discussions here so you might want to have a search. However, I would say that I think I can only recall one person reporting that the unit was defective and would say cosmetic condition isn’t something that’s a cause for concern – overwhelmingly, feedback will be very positive.
*edit* Hee, I just read this thread -
https://forums.macrumors.com/threads/1696434/ - where someone has bought a refurbed iMac and there's a problem with it. However, this doesn't alter my point about faults being a common problem.