I sent a photo of the damage to my local SA. She said I should bring it in for them to look at and if it could be repaired, it would be at a fee to me. Although if it's just $35, I'll probably do it, I also say if it's just $35, Coach should eat this to do right by those who bought a bag with known hardware issues. I'll let you know what I find out!
May I ask to see if you have an update on whether Coach agrees to fix yours? I have an Alpine Moss with the same problem...