Call the manager and ask for a refund. If not report them to the Better Business Bureau. There is not excuse for not giving you a new wallet. I had several LV wallets and they all fell apart in a short amount of time. I'm disgusted with the canvas handles, filthy and they could do nothing. I will never buy another LV. I have the epi which lasts best out of all of them. Perhaps you can ask for an exchange for something sturdier. But definetly get it exchanged.
If you paid on a credit card, you can tell them you will refuse to pay for it unless you get a new one. You can write to your credit card company stating you received defective wallet and LV refused an exchange. They have the wallet, so you can refuse to pay at this point.
However, all this is awful. With such expensive bags they should willingly exchange it.
I would go back to the store, ask to speak to the manager, and refuse to leave until something acceptable is done - like an exchange. I would be polite about it but firm. Just smile and say "I am staying here until this matter is resolved to my satisfaction."
Waaahhhh..... I went back to the store today and they gave me a repair slip. They took the wallet and said they will call me back. I am VERY DISSAPOINTED and although I'm not a Gucci lover I may just turn to them out of spite!!