In my approx. 20 years of buying Coach, I sent 2 bags in for repair (both less than 3 months old & both used no more than 5 times). The first one, stitching inside the handles was broken - and in areas it would weaken with continued use. I got a letter saying they couldn't repair it - and did I want the bag back, or full credit for the bag. The boutique I normally shop at called before I got the letter, told me the information was in the computer, and if I opted to take the bag back, I could select any Coach bag @ 40% off. The second bag, I sent for repair was a Flagship edition - and decorative stitching - heavy thread on the handles - had a loose end of broken thread - cut too short & not secure. When I took in for repair, the SA noticed the other handle had the same issue.
I got no communication for 4 weeks - and just happened to ask about it when I was in the boutique on Friday.... The SA researched for me, and found out a "merchandise card" had been sent out that day. I received the card yesterday - and a letter with it saying my bag couldn't be repaired - and if I wanted the damaged one back, in lieu of the credit (they would cancel it) - that they would hold the bag for 30 days.
The SA told me this seems to be the current way they are going to handle repairs - if they can't fix it - they will send you a full merchandise credit.
I opted to get the first one back, because I'm sure I can have it repaired at a leather shop. The 2nd one, not too sure, because of color that it could be matched. If you love your bag - I'd try to get it repaired on your own. I think the only reason the $20 fees are waived is if it's a fairly new bag - and also, if you do most of your Coach shopping at the same boutique - and in their customer base, they will usually waive fees.
Good luck with whatever you decide to do.