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With any failure I always take it to Apple. Regardless of how I think they'll handle it. Getting the product looked at is free. At worst I waste some time and am given a repair estimate I don't want to (and don't have to) pay. At best they fix the device free.

I've had Apple fix products outside of warranty for free. IMO it's worth your time. And with this particular fault in guessing you'll leave happy (free repair).
 
Here's a brief discussion that John Gruber of Daring Fireball is having about a similar issue. His wife's Series 0 38mm Stainless Steel watch had the back pop off when she removed it from the charger. Apple replaced it, but not on the spot.

https://overcast.fm/+BtuzS8Oao/51:05 (the discussion is only about 3 minutes long).
 
Update- I just got out of the Apple Store here in Tampa. It turns out that I had purchased AppleCare+ on the watch and had forgotten about that, so it was covered regardless.

I asked them what would have happened had it not had AppleCare+, and he said that they likely would have covered it anyway and repaired or replaced it, so good news if others have this problem.

They are not repairing in the store, they send it out to a central repair place, and he said depending on what they decide, it may be likely that they just send back a refurb new one. I'll update again when I come back to pick it up.

Apple customer service shines again! Proves why we stay so loyal to them, lol. Oh and they got me in for the appt. in record time too, sat down and the genius walked right up. He said they don't get very many watches in for repair.
 
Update- I just got out of the Apple Store here in Tampa. It turns out that I had purchased AppleCare+ on the watch and had forgotten about that, so it was covered regardless.

I asked them what would have happened had it not had AppleCare+, and he said that they likely would have covered it anyway and repaired or replaced it, so good news if others have this problem.

They are not repairing in the store, they send it out to a central repair place, and he said depending on what they decide, it may be likely that they just send back a refurb new one. I'll update again when I come back to pick it up.

Apple customer service shines again! Proves why we stay so loyal to them, lol. Oh and they got me in for the appt. in record time too, sat down and the genius walked right up. He said they don't get very many watches in for repair.
Glad you got it sorted.... Bonus on finding out you had AppleCare+ but as you say they would have replaced it anyway.
To me it was defective plain and simple. Apple would have had a hell of a time trying to prove different.
 
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