I understand. There isn't a company in existence who can afford to treat customers in this manner.
I used to work for
Nordstrom and we took back just about anything! I would have asked for a manager and would have insisted on either an even exchange or a full credit if they didn't have the exact item in stock. And if they didn't have the exact item the proper thing to do (in the interest of good customer service) is to offer to track one down for you.
This was a very poorly handled transaction, sorry that you had to go through it. As a result of Coach's poor service now the customer comes to a busy forum to relate her negative experience (which I don't blame you for one bit, btw!) I'd probably do the same.....