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MusicMagpie smashed my phone?

Hi all, I’d like a little advice if I may.

I sent my phone to musicMagpie recently. It was in very good condition and I packaged it carefully in its original box and then inside an outer box that Apple used to ship phones in. 

Today I got an email from them saying that the screen is entirely smashed or cracked and they are offering £400 less than the original offer which is insane as it doesn’t even cost that much to get it repaired by Apple. 

I’m just wondering what my options are because it’s essentially my word against theirs. The phone was in excellent condition when I packed it and so either it got damaged in transit (which I find unlikely because of how well packaged it was), it was swapped before it got to them, they damaged it once it arrived or they are trying to pull a fast one. 

They will deny the latter two options and as they provide the shipping label there was no opportunity to add postal insurance. 

Am I stuffed? And if so how can this be fair?

Something else I am considering is that since I believe it’s still covered under Apple care I could get them to send it back and get it repaired. But that will only work if they send the same phone back - if they send back a different phone that is smashed I would be stuck with a smashed phone that I would have to get repaired at full cost. 

Thanks for your help! 

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