. . and placed in your warranty replacement pool (anyone who thinks he's getting a new unit in place of his failed one needs a better grasp of reality).
Idealy, the pool should quickly come into balance with returns and it usually does. The only way you should have refurbs to sell is if replacements are being refused. If they are being refused, you have some unhappy customers.
Now maybe they have some other explanation, but I'd like to see it audited before I accept it.