Thats called the SIM card.
I think Emily is right, they will charge you the normal price of the new phone. Although my dad exchanged his phone for a new free phone, he started swearing at the guy at the store and said that his phone absolutely sucks, and that he loses a signal everywhere he goes. It was true. He got 2 free phones for my mom and him. So if you want a free phone just loose your temper and go psycho on the guy.