A refurbished device is a pre-owned device that has undergone tests, checks and repairs as necessary to ensure it's in full working order before being sold on. Refurbished phones are graded and priced according to their condition.
Refurbished phones may have scratches depending on the grade. Excellent may have very light and almost invisible scratches invisible from 20cm away. Very good has light scratches and good has visible scratches with possible dents.