My friend recently brought in her iPhone 5 for service and they replaced it instead. It came with someone else's music on it. Everything else was as it should be, her Apple ID was the only one on it. Only the apps she had downloaded herself were there. A little sloppy when Apple's iTunes agreement (the "I Agree" thing) is now 24 pages.

An AASP would have had to send it in and gotten a replacement from Apple, but the stores themselves bend those rules a little and they may have given her one that was being used as a loaner, to get her phone replaced faster. She may have asked them what they could do to speed up the replacement process. Not that this excuses them not wiping it, but that's my best guess as to why there was music still on it. A refurb shipped from Apple I would expect to have a very VERY low chance of having any former user data on it.