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the product exchange plan covers batteries as well.
tell them that the battery is no longer holding a satisfactory charge and that you would like the phone replaced. they will replace your iphone as they are unable to ship you a new battery. there is a one time battery exchange as part of your product exchange plan agreement.
generally they will do a battery test, confirm that it is discharging at a rate indicative of battery failure and then replace your phone. the iphone is the ONLY phone that is replaced under the product exchange plan because it does not have a removable battery.
they should replace your iphone at which point you can opt for another iphone or use the original value of the phone credited towards an upgrade. you will have to pay the difference if the phone you are upgrading too is more expensive.
also, the product exchange plan will carry over to your new phone.
if you still have problems shoot me a PM
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