In this specific situation I would say that if the part is under manufacturer warranty, then the retailer should either offer a refund at the price paid or assistance for the customer in getting the manufacturer warranty replacement. Expecting the retailer to replace the faulty unit when the *wholesale* price has changed dramatically is.. unfair. I'm sure many people would scream "cost of business" and perhaps they are right. But, if the retailer is making a good faith effort to resolve the issue in a manner that keeps the customer "whole", that should be the metric for both "legal" and "moral".