In my case I would imagine that that either the screen would be repaired, should it only the oleophobic coating that was damaged, or the entire screen replaced. It would then not doubt be resold or exchanged as a 'Refurbished' model.I have always wondered what happens to the phones that people send back??
However, I think most of these phones go back with complaints like 'it has a yellow screen' or 'the power button rattles' and Apple just sends those back out again as they don't view those phones to have faults.