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Maybe, both my wife and myself had our iphones replaced under warranty. But even if you do get it back, bottom line is, someone has had access to your personal data.
It's a concern I guess, but not a big enough one for me. Especially if you can do a factory restore before returning. I know the restore doesn't necessarily make your data unrecoverable, but good enough for me.
You also have to put some degree of faith into Apple and that they are going to do good by you....
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