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From there they get shipped to the supplier, then back to the manfacturer to either be destroyed, dissassembled for parts, or refurbished.
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That does raise a question though.. What happens to the refurbished ones (legally can't sell it as new)? I thought I read a thread here once where a guy found some banged up boxes selling at a Radio Shack Outlet (which I guess is different from a normal store) for like $25-$30.