I had a similar experience with a car stereo at BB. I had purchased it open box so I decided to get the warranty. After a year or so it stopped playing discs at all so I took it in. A month later got it back still broken, a month later, the same. The third time it came back broken, I asked for them to replace it with a new "equivalent" model per the terms. Their manager told me that since I had gotten it open box, I would be allowed to choose another model in the $120 range as opposed to the ~$300 range that would be considered a similar product. Of course they only had an $80 stereo and a $150 stereo at that time so I was stuck with the crappiest stereo they carried. When I raised a stink about them refusing to at least refund/store credit the other $50 since I was already getting rather screwed by the deal, they had security kick me out.
Have not, and will not ever give Best Buy another penny of my money.
(On a previous trip, I was told that I could not write a check to pay for a camera. They could verify that there were funds in the account, but since they apparently don't consider a passport valid ID, they refused to accept it)