Do Apple stores sell used iphones as new products?

If an iphone is returned to Apple, do Apple stores re-sell it as a new iphone without informing the customer that it is new? If a customer asks for a new phone is it acceptable for an Apple store to sell it as new without explaining to the customer that it is a used returned product? And if an Apple store is selling a used phone is it appropriate to charge full retail cost?

Thank you.