My wife bought a $20 Samsung mobile phone with a $29, 90-day, Virgin plan. You could barely hear the person talking into it, yet it would amplify sounds a long distance away to an irritating level. For instance - a bird chirping in a tree - or a screen door that needed oiling - was incredibly loud and hurt the listener's ears, due to having to hang on every quiet word from the person speaking. At times I could hear myself on an "echo delay" coming back from her phone. Also, often she sounded like a robot, or the stuttering FFWD on a CD player. Many times we had to hang up and call again to try and hear each other. Later the stupid thing started turning itself completely off during calls for no apparent reason.
She took it back to Virgin. They had it a few weeks, refused to provide a loan phone in the meantime, and it returned with all the same problems. They told her because they couldn't find anything wrong with it the first time, it would now cost her $66 to send it away again to be retested. (I don't believe they tested it the first time. So they wouldn't the second time either.)
They also said after hearing of the $66 fee, most people just buy another cheap phone from them. But the ridiculous thing never worked properly from day 1. And they haven't honoured the warranty, so why should she risk buying another!?
What I'd like to know is, is it even legal for them to demand a $66 fee, to repair a $29 phone? And secondly, to provide no loan phone for weeks, or at the very least extend your plan while you can't use it, since they have the phone for weeks?
You may have seen the discussion on Harvey Norman franchisees. If this post is correct, you wife should be able to demand a refund since it was never fit for the purpose it was sold for.