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What should I do about upgrading with a broken screen?

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I walked into a Verizon authorized retailer today and upgraded my iPhone 5s to a 6s. I am due for an upgrade in July but was looking for a new phone as mine has a substantially cracked screen and I wanted some extra storage on my phone. It was a rough experience but one of the details the service representative brought up was that I would need to send in my device as part of the early upgrade process (through Edge, I believe, though that phrase wasn't used in our chat).

The representative seemed to think that if I got the screen repaired, it wouldn't be a big deal. That information seems very, very wrong after reading some of these forums. I fear that a replaced screen and some dings on the corners of the phone would prevent me from being charged the $200 fee for not having a phone in "good working condition."

A few thought and questions:

1. Because my device is not in what I would consider "good working condition," is it even worth trying to repair the screen and send into Verizon so I don't get charged $200? It sounds like I would lose this phone altogether and still need to pay the $200 if the phone were not up to Verizon's standards? ($100 repair + $200 fee from Verizon + $0 in resale value on my own = a bad investment, right?)

2. If I choose to just lose the $200, could I unlock my original 5s and sell it to a friend to use instead? More specifically, can I unlock my 5s at all in this situation? Or could Verizon prevent that phone from being used again?

tl;dr -- Can I unlock a phone and sell it to a friend that Verizon expects to be part of a "trade in" type of deal for an early upgrade?

Thanks everyone!

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