I have to say that I am really confused by some of the responses to this thread.
First, to those people who never learned reading comprehension in school and keep harping on the "free replacement" thing: the OP has stated over and over again that after he found out it was an option, he was more than willing to fork out the $150 to Apple for an out-of-warranty replacement/repair. This isn't the OP trying to get something for nothing, and the out-of-warranty service is an option that Apple explicitly offers its customers. Go to http://support.apple.com/kb/index?page=servicefaq&geo=United_States&product=iphone, click on "Warranty & Service Pricing", and then "My iPhone is not eligible for warranty service. What are my service options?"
That having been said, if I were the OP, I would have gone back to the store at a later date to speak to a different Genius to get a second opinion...or, better yet, I'd have gone to a different store entirely. Is it possible that they have documented the first Genius's decision? Sure. But it doesn't hurt to try.
Personally, I find the Genius's ruling in this case to be unreasonable. The way that the out-of-warranty repair program works is that you surrender your broken phone + $150-200 to Apple, they give you a refurbished replacement in trade, and then they refurbish the broken one you gave them and stock that as a replacement unit for the next person who comes along. (You can be sure that there is also room in those numbers for a profit margin for Apple, as well.) Of course, in order for this program to work without bleeding Apple financially, your phone has to be able to be repaired for less than the cost of the out-of-warranty repair fee, and certain kinds of damage may exceed what they can fix for $150. This is why they can refuse certain damaged phones the OOW service, which is a perfectly reasonable thing for them to do: some phones are beyond repair, or even if they aren't, the cost and effort to do so is not worth it and there isn't enough left of the phone to be salvaged.
So Apple has a clause that allows them to refuse service for any reason, but the stated examples are phones that are "catastrophically" damaged (e.g., ground into a fine dust or otherwise unrecognizable as an iPhone) or phones that have been subject to "unauthorized modifications" (e.g., components on the mainboard have been unsoldered and then other non-standard parts fitted in their place).
The Genius tried to spin a missing sticker and a missing water damage indicator -- both results of third-party attempts at repair -- as signs of "unauthorized modification" (or, in his words, "tampering"). But I don't think any reasonable person would call a missing sticker and a missing water damage indicator an "unauthorized modification" that makes the phone any more difficult to repair or remanufacture than normal. The OP had already admitted to the Genius that it had been liquid-damaged, so what do they need the water damage indicator for? That indicator is there in order to help them weed out liars who have IN-WARRANTY phones who come to them and try to defraud them by feigning innocence about the real reason for their phone's death. Apple does OUT-OF-WARRANTY repair for liquid-damaged phones all the time, and they can certainly reapply a stupid sticker during the refurb process; the missing sticker isn't service-affecting.
Companies like Apple do use tamper-revealing stickers ("warranty void if removed") all the time for reasons similar to why they use the water-damage indicators: if someone goes inside their own phone and breaks something, and then comes crying back to Apple claiming that the phone broke on its own due to a manufacturing defect, the manufacturer has a right and a duty to protect themselves from such fraud. But after the phone is OUTSIDE of its warranty coverage, and repairs are being paid for by the customer regardless of fault, it doesn't much matter if the customer broke it or if it failed on its own, now does it? It's going to cost the customer the same amount to repair either way. So the fact that a sticker is missing is not equivalent to a "warranty void" situation because *the warranty has already expired anyway* and *the OP has volunteered to pay for the repair*.
In short, I believe that another more reasonable Genius may side with the OP if he were to try again and ask for an out-of-warranty repair option on his phone. In fact, OP doesn't even need to visit an Apple Store to do this: OP can call 1-800-MY-IPHONE and ask to do the out-of-warranty replacement by mail. They'll charge his card $150, he mails them the phone, and they mail him back a replacement. I bet you if you take that same phone and mail it in that the person on the receiving end will not have a problem declaring this phone to be eligible for the OOW service option.
-- Nathan
First, to those people who never learned reading comprehension in school and keep harping on the "free replacement" thing: the OP has stated over and over again that after he found out it was an option, he was more than willing to fork out the $150 to Apple for an out-of-warranty replacement/repair. This isn't the OP trying to get something for nothing, and the out-of-warranty service is an option that Apple explicitly offers its customers. Go to http://support.apple.com/kb/index?page=servicefaq&geo=United_States&product=iphone, click on "Warranty & Service Pricing", and then "My iPhone is not eligible for warranty service. What are my service options?"
That having been said, if I were the OP, I would have gone back to the store at a later date to speak to a different Genius to get a second opinion...or, better yet, I'd have gone to a different store entirely. Is it possible that they have documented the first Genius's decision? Sure. But it doesn't hurt to try.
Personally, I find the Genius's ruling in this case to be unreasonable. The way that the out-of-warranty repair program works is that you surrender your broken phone + $150-200 to Apple, they give you a refurbished replacement in trade, and then they refurbish the broken one you gave them and stock that as a replacement unit for the next person who comes along. (You can be sure that there is also room in those numbers for a profit margin for Apple, as well.) Of course, in order for this program to work without bleeding Apple financially, your phone has to be able to be repaired for less than the cost of the out-of-warranty repair fee, and certain kinds of damage may exceed what they can fix for $150. This is why they can refuse certain damaged phones the OOW service, which is a perfectly reasonable thing for them to do: some phones are beyond repair, or even if they aren't, the cost and effort to do so is not worth it and there isn't enough left of the phone to be salvaged.
So Apple has a clause that allows them to refuse service for any reason, but the stated examples are phones that are "catastrophically" damaged (e.g., ground into a fine dust or otherwise unrecognizable as an iPhone) or phones that have been subject to "unauthorized modifications" (e.g., components on the mainboard have been unsoldered and then other non-standard parts fitted in their place).
The Genius tried to spin a missing sticker and a missing water damage indicator -- both results of third-party attempts at repair -- as signs of "unauthorized modification" (or, in his words, "tampering"). But I don't think any reasonable person would call a missing sticker and a missing water damage indicator an "unauthorized modification" that makes the phone any more difficult to repair or remanufacture than normal. The OP had already admitted to the Genius that it had been liquid-damaged, so what do they need the water damage indicator for? That indicator is there in order to help them weed out liars who have IN-WARRANTY phones who come to them and try to defraud them by feigning innocence about the real reason for their phone's death. Apple does OUT-OF-WARRANTY repair for liquid-damaged phones all the time, and they can certainly reapply a stupid sticker during the refurb process; the missing sticker isn't service-affecting.
Companies like Apple do use tamper-revealing stickers ("warranty void if removed") all the time for reasons similar to why they use the water-damage indicators: if someone goes inside their own phone and breaks something, and then comes crying back to Apple claiming that the phone broke on its own due to a manufacturing defect, the manufacturer has a right and a duty to protect themselves from such fraud. But after the phone is OUTSIDE of its warranty coverage, and repairs are being paid for by the customer regardless of fault, it doesn't much matter if the customer broke it or if it failed on its own, now does it? It's going to cost the customer the same amount to repair either way. So the fact that a sticker is missing is not equivalent to a "warranty void" situation because *the warranty has already expired anyway* and *the OP has volunteered to pay for the repair*.
In short, I believe that another more reasonable Genius may side with the OP if he were to try again and ask for an out-of-warranty repair option on his phone. In fact, OP doesn't even need to visit an Apple Store to do this: OP can call 1-800-MY-IPHONE and ask to do the out-of-warranty replacement by mail. They'll charge his card $150, he mails them the phone, and they mail him back a replacement. I bet you if you take that same phone and mail it in that the person on the receiving end will not have a problem declaring this phone to be eligible for the OOW service option.
-- Nathan