Little Children & Chanel

Maybe you can start by asking your neice what she likes about the bag. Is it the color, shape, size, softness, etc.?
From that information, you can find her something she'll like that's age-appropriate. Take her to regular handbag shops to look around. There's a chance she'll see a $20 dollar bag that she loves.
Replicas are awful, and inspired bags are ... kind of sad (because contrary to their name, they are very UNinspired).
 
Thanks for all your help! I bought her this cute little tinkerbell bag from walmart this weekend. She picked it out too!! it's funny how she went from loving chanel to a 5 dollar purse in a matter of hours ;]