What happens to returned Kindles?

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I was reading one of the more popular Kindle forums out there, and one interesting question came up that I thought was very legitimate:

What happens to Kindles that get returned ?

I never really wondered about all the Kindles that were returned to Amazon. I am sure Amazon doesn’t destroy the Kindles that are returned. There were a few people who claimed that Amazon fixes the returned Kindles and sells them as new. Somehow I don’t think that’s the case. So, here is the question for the good people of Amazon: Where are the refurbished Kindles? Why are they not for sale for $199 or so?


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