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I would charge it until the red light turns off. The indicator isn't always accurate. Since the 505 has been discontinued for sometime now, you probably can't expect the 7500 page turn since the battery isn't new. Even the 7500 page count is for continuous page turns I believe since even leaving the unit on drains the battery a little bit.
I wouldn't jump to the conclusion that the battery is defective until you give it a full charge and see how it behaves.
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