I'm not sure many people here will say this, but the department store bikes are much better than they used to be; even passable. If the bike he wants fits him and he feels comfortable, let him save a couple of hundred bucks. Of course it won't be as good as an entry level LBS bike, but it will get him around. If the cheap components freeze up or something, you'll just be able to say "told ya so!"
Millions of people around the world ride bikes that are extremely old and in terrible condition EVERY DAY as their only mode of transportation.