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It isn't a free replacement. It's a $50 for a 50% chance of replacement if you need a replacement, and if you don't you still have to pay the $50.
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This might come as a bit of a shock to you, but not everywhere has terrible customer protection. I was less interested in the (free) 2 year warranty than the 14 day free return mandated by the EU.

I wasn't really risking being denied, as long as I didn't break any rules.

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Consumer protection doesn't normally include buying you a new phone if you damage it.
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