That seems wrong, both ethically and factually. On the former, how is it the customers fault if she ends up with three defective products? On the latter, there was a guy in the iPad forum who returned more than 10 iPad 3's because they had irregular backlights, coloring issues, or bleeding. He showed photos in the forum to evidence these issues. I doubt that he got flagged. Can you give some more background information on why you think this policy exists? I know that Amazon kicks out customers when they return too much.