I think I'd contact them again and quote the return policy from their site...
Quote:
KOBO SUPPORT
What is the Return Policy for eReaders?
Getting a refund for your Kobo eReader
If you purchased your eReader from Kobo.com and would like to return it, please contact Customer Care. The return policy is as follows:
Items that can be returned may be refunded up to 30 days from their shipment date.
Promotional discounts have no cash value and are not refundable.
We reserve the right to verify return product information before issuing a return credit (i.e. confirming damaged product).
We are not responsible for any damage that may occur during the return shipment of your order.
Unless we made an error in order processing or shipping, return-shipping fees will apply. For your convenience, shipping charges will be automatically deducted from your refund amount.
Note: Kobo eGift Cards and Kobo Protection Plans are not returnable.
If you did not purchase your eReader from Kobo, please return to the store where you purchased your eReader and complete their refund process.
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http://www.kobo.com/help/response/?i..._utmk=84962329
EDIT: Oops, look like you already mentioned the policy. I'd try again with a different cs rep.