This phenomenon was noted by new users of the PRS500 and 505. It takes a few cycles before the battery meter calibrates accurately. Also the device is not fully charged when you buy it.
I found (with both my 500 and my 505) that it was useful to let the battery drain to nearly empty, then to recharge it for a long time, preferably using the mains charger overnight. After a couple of charges both devices behaved perfectly.
It is possible that the same holds true of the 700.
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