To elaborate, Verizon has what is known as a "Hassle-free Replacement Policy", which provides for a Brand New unopened phone as a replacement for the one you now have. Once the phone is more than 14 days old, it falls under the "Certified Like New Replacement" policy. That policy allows for Verizon to use phones which were returned by other owners for any variety of reasons, even if it was simply because they decided to go to a different model, brand or even carrier. These phones are received into inventory at Verizon, then Verizon either themselves or via an outside contractor completely revamps the phone, wipes off any previous owner's data, repairs any identified flaws, replaces any exterior that has "cosmetic" damage, runs a full test on the phone, and boxes and ships it back to Verizon for further shipping out to its customers, or drop-ships it directly to those customers upon the direction of Verizon.
Surely you can understand that a phone which is even in the hands of a customer one day can never be re-sold as Brand New, so the only way that these phones can be placed into someone else's hands is via a warranty replacement or sold as Certified Like New (read Refurbished) devices. It's not much different than a car that rolls off the lot and once you own it, any warranty claims are handled through the warranty policy. It is not specifically within your rights to be able to take an item back and get a new replacement, unless specified in the Retailer's Return Policy. Return policies vary from retailer to retailer and even from product type to product type within a retailer. Some have more restrictive limits on returns for electronic items, items with motors, etc.
What you can be sure of with that replacement is that it is covered under the original 1-year warranty as specified, and that the device also carries its own 90-day replacement policy if your one-year policy is near its end, so even if the phone is replaced on day 364 of your original purchase date, you will still be protected under the devices 90-day replacement warranty.
Finally, even though this item may be technically "used" in the sense that it was at one time in the hands of a consumer, it must still pass all the same tests as a new one does, and there is a list somewhere, but not at my immediate disposal which details all the "checkpoints" it must pass in order to be "Certified Like New". In other words, you have a phone now, that is virtually undetectable as being different from one directly out of the box and new, except that it has been disclosed as not new, but Certified Like New. There are some who feel that a CLNR phone is in some ways better than a new one, since any reason that it was returned has been either excluded or mitigated, and it's gone through a full second barrage of testing before shipping to you, so they feel it's less likely to have problems out of the box than even a new one.