What does this iPhone replacement device mean?

I'm getting an iPhone but it says there's a 699.99 replacement device fee. What does this mean? Does it mean if I drop it and want a new one its 699.99? Lol so confused. It's on best buy its the iPhone 5s for 99$

It means that if you buy with a new contract or when it expires a contract renewal with your carrier - then you get it for the lower price. The "replacement price" means that you're already on contract and you're not eligible to renew it yet. There's no "upgrade bonus" available so you end up paying the full retail price.