My focus in my business is on 1) lowering customer acquisition cost, 2) increasing the number of customers, and 3) maximizing the long-term value of a customer.

If a customer calls or writes complaining about a $19 part, unless it's something I can help with over the phone VERY easily (try switching the A and B plugs, etc), I will ship them a replacement right away and depending on whether or not I wanted to look at the item they originally got I might send them a pre-paid USPS label to get it back to me. I am not going to ask them to try and fix the $19 part if it came out of manufacturing and QA with a problem.

Handling something like this with great customer service is going to maximize the long-term value of that customer. Consumers have a higher confidence in companies that quickly resolve issues to their satisfaction on a problem order than they do with companies that have never had a problem shipment. Being cheap, or just demanding to be right over a $19 issue, I guarantee you are lowering if not immediately ending the long-term value of that customer. If your acquisition cost is more than your profit-to-date for all order to that person, congratulations, you are upside down...over $19.

So, for me, it's not a question of right and wrong, it's a question of keeping the cash coming in, and taking a loss now and then in order to keep the customer loyal.