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Thanks for all your advise guys.

They refunded the watch in store today - the guy who was serving me said it was out of warranty because of the scratch but his manager came over and immediately disagreed with that decision and refunded it.

The bad news is there is no stock for over a month! :( but overall good outcome.
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I'd definitely try to return/exchange it. If they refuse, I think you're still in the window when you can buy Apple Care, right? Buy it, then try again. There may be a replacement/repair fee, but if that's your only option (besides living with it) then that's what I'd do.

Good advise.. thank you!
 
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