Not necessarily true. My wife and I bought new iPhone 5s models at Target last year, operates via TracFone service. I see that they are still advertised for sale at Target Stores now, for $199. I believe you may be able to get an iPhone 6 on TracFone service for $288 at Target online. TracFone is no contract, and the service cards for minutes is cheap. Costs me about $9/month when I buy a 1-yr card. I have about 6,000 minutes saved for data/text/calls from carrying over minutes from previous TracFones over the years.
Tracfone iPhones are refurbs in new boxes. . . as are the ones being sold at Target. Apple had amassed a lot of iPhone 5, 5S, and 6 models for sale in India, but the Indian government refused to allow sales of refurbished phones. Apple instead worked out an agreement to manufacture iPhones in India to meet their requirements. Now Apple was stuck with a lot of new looking refurbished iPhones. They sold them to the monthly phone service type companies.