Are they eligible for an upgrade? If so, what you can do is go to VZW and buy a VZW giftcard for the amount of the iPhone you want to get them (you can do this even if they aren't eligible but you would have to give them the amount of an iPhone at full retail). I'm not sure if they will let you order one for your friend using their account if you aren't an authorized person on their account...since if you get it at the advertized 2 year agreement price they would have to agree to a new contract. You can always call or visit the local VZW store to see what other suggestions they have for you to achieve giving your friend an iPhone as a gift.
Just buy a verizon iphone, show them you have an account, buy one, dont activate and give to them, make sure they dont put your account on it
If he takes subsidization for the device and doesn't activate it within a timeframe then he WILL be charged full retail for the phone.
do they want an iphone? better check on that first
example, you give me one, it goes right on ebay.craigslist
just pay full price and its all good