I bought a Tux for my Pit Bull about 5 months ago. She loves it and it is her favourite toy, she never gets bored with it. Unfortunately she has chewed through the sides after 5 months.
I know you have the refund/replacement policy, but unfortunately it will be too much of a hassle and cost to send the broken item back to you, as I am in South Africa...
It's great that you offer the replacement, but it's inconvenient to pay for the shipping and then waiting to receive the replacement.
I think that the Toy stores that stock these items, should take the broken items back and replace it, and then the store can send the goods back to you. Why should the consumer pay? Surely the store that stocks the goods should take care of the replacement policy and costs involved.