Out Of Warranty Replacement?

  My wife has an iPhone 4 that is just a couple of months out of warranty. The home button is starting to stick and you have to press it fairly hard to get it to register. Plus now the headphone jack seems to be getting loose. I was looking on the Apple repair section and noticed an option to request a repair at my expense.  There was a replace option for around $200. I was just wondering how this works. If I pay the $200 and they can not repair it do they send a new or refurbished unit to replcae it? Or is it just a repair of the current phone. The screen and everything is in great shape, always had a protector and case on it so would hate to get a replacement that has flaws on the screen. Thanks for the help.

Apple does not repair devices.  They will replace batteries, although this is typically done by swapping devices.
They will sometimes replace screens or back cases, but 99% of the time "repairs" are simply device swaps.
The replacements are refurb units and are virtually indistinguisable from a new device.

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