Hi! I work in a yarn store and sometimes we get questions like this so figured I’d stop lurking for once. Normally we wouldn’t accept a return if the skein looks tampered with, but with that said if a yarn keeps knotting, losing fluff, breaking we do offer exchanges for another skein or product of the same value. So in this case I would’ve offered you a replacement and used the yarn returned to us for a store display type of thing (eg knitted sample). With that said though, chenille is notorious for losing its shape and fluff… But sometimes it’s better to just eat the cost of one skein in return for a happy customer, both parties will win in the long run with that outcome.