I have to say that I agree 100% completely with the OP as I am in the exact situation!
I have been buying electronics for a long time and in that time I have NEVER been given a refurb in place of brand new product I just purchased.
There is a reason that I continue to shop at places like Bestbuy and Futureshop and that is because I have confidence that if I get the product home and it breaks within a reasonable amount of time, that they will replace the defective product with a brand new one off the shelf, with no questions asked.
This gives me the confidence that when I spend my hard earned money, that I will be getting exactly what I paid for.
Some of you will argue that a refurb is just as good, or better than a new phone, but I simply don't buy it. No matter which way you swing it, these are used phones and as such I have no idea what they have been through.
Secondly, it's all about principal. As the OP said, our money is worth a lot to us and some of us work very hard for the things we buy. When I walk into a store and buy a product I expect that company to treat me, and my money with a certain amount of respect.
To me, when someone is given a refurbished phone after only 2 weeks (or 4 days in my case) what it says is that they don't respect us enough as customers to give us a product that is exactly what we originally purchased. To me (and I assume many others), it feels like we were cheated out of what we originally bought because Apple doesn't want to loose money on a product that has obvious problems.
So to the OP, you are right to have done what you did. I am doing the same myself. I refuse to take a refurbished phone after only 4 days of owning the one I bought.
This fiasco with Apple has shown me that I can not trust this company to treat me and the money I spend with respect and as such this iPhone will be my first and last Apple product.
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I wanted to add this on the end to show you the difference between apple and another company I deal with.
About a year ago I ordered a 24" monitor from Dell. When I plugged it in, it had a dead pixel. As a graphic/web designer this simply wasn't acceptable to me, so I called Dell and they said, "No problem, we understand completely, we're sending out a new one."
About a week later a new one showed up, I plugged that in and low and behold, another two dead pixels. I called them back and they said, "I'm so sorry you're having issues with our monitors, we do have a 10 pixel maximum before they're considered defective, but we want you to be happy!"
So, again they sent out another monitor. At one time I had over $4000 worth of monitors sitting in my place as I wanted to wait to make sure I could pick the best one. The new one they sent had no dead pixels, I sent the others back and I am still using that monitor, defect free, today.
What this did was give me the confidence that if I shop with Dell, that I will get what I paid for and they will make it right no matter what my "petty" concerns are.
I can't say the same for Apple. After 4 days of owning my phone I am now getting a refurbished one, I feel cheated and neglected as a customer. I feel like Apple is trying to save a buck by pawning off phones to me that went back to Apple because they were broken in the first place.
I DO NOT want a USED phone!