It means they will upgrade your items by 1 for the life of your plan. If you sign up for 5 items, and stay with 5 items, you will get 1 free upgrade meaning you will get 6 items. If you change your plan later however, that free upgrade could go away.

SandieB

The upgrade for free items happens to be a reward system. A kinda thank you for being responsible and not trying to cheat the system ie returning items undamaged or purchasing certain clothes. Then jist keeping up with payments without issues. Other perks have been discounted offers in hopes that you buy

Exactly what Sadie said.