Of course it is always the fault of the shop and never a customer. I have had many customers who choose to buy the wrong size frame despite my advice or buy the wrong lock and their bike got stolen or have had people buy bikes they aren't going to work for them even though I told them they should have gotten something different. I have also seen plenty of times when a customer refuses to repair their bike and it falls apart and we get the blame for their chintzy bike maintenance habits. Not everyone listens to their local shop but when they make a bad decision it is suddenly our fault. People love to lie about a business because why not it is a faceless corporation not a bunch of human beings. Yes sometimes people do screw up and make mistakes we all can do that nobody is perfect but always immediately saying it must have been the shops fault in every situation is wrong.

I have gone through those bike size guesstimates and they have been wrong before. Saying someone should go for that because the company must know what they are doing is not always the case. This is why one should always test bikes before they buy them so they can get a feel for different sizes.

I am not sure who is at fault here but certainly the shop does not need to take back a used bike but the shop could certainly help get it better fitted for the customer either through them or maybe by recommending a local fitter. In this case though I would have done more research into the fit and geometry of the bike before dropping that money.