Just got this email:

Thank you for your recent purchase on shnoop.com. It has come to our attention that the Sandisk Sansa 2GB Fuze MP3 player that you purchased was not of the quality that was advertised. We sincerely apologize and regret this isolated incident, for which we assume full liability. At this time, we would like to offer you the option of either sending back the unit at our expense for a full refund, or a 20% partial refund, in lieu of sending it back, via the original method of payment used. The partial refund amount reflects the value that you could have purchased this unit elsewhere. Please email us back at your earliest convenience and let us know which you would prefer, so we can help you resolve this right away.

Regards,

The Shnoop Team
www.shnoop.com
So they're finally communicating with all customers, but they're still leaving out the facts! Shame on Shnoop for the vague "not of the quality that was advertised" statement. By all appearances, the only thing "not of the quality that was advertised" about my unit is the fact that it has no warranty. Otherwise, I'd be thrilled with the quality of the unit. Which is exactly why they left out any mention of "refurbished" or "warranty," don't you think?

I can't believe how incredibly deceptive these guys are. That message is crafted precisely so that if I haven't discovered on my own that the item is refurbished, and found out that it has no warranty, their email tells me nothing. "Not of the quality that was advertised? Wow, seems great to me. And anyway, I have a one-year warranty from Sansa, and another year for using my AMEX. If it breaks in the next two years, I'm covered." Except you're not.

What a sneaky, sleazy way of "communicating" with the people who bought this product. They just refuse to give customers all the facts and mention that the unit is refurbished and has no warranty. Kind of like they left that out that the first time around, too.

If they're sincerely trying to do the right thing, then it's a shame that they keep botching it so badly. No matter which option I choose, I'll still be left believing that Shnoop is shady and unethical for not mentioning "refurbished" and "warranty" at all and hoping most customers never find out about it.

OK -- Schnoop credited my $7.08 refund to my PayPAl account. It may not be as much as I thought was fair -- but it is something. $28.34 shipped for a refurb is comparable to the recent Newegg deal -- so guess I'll live with it.

Yes - they have not contacted all customers. Only those who email them.
After their routine email response, I went ahead sent them the email below and after sometime filed a dispute with PayPal. Here is their response - they are not budging with the 20% or sending it back. They will not replace it with a new one - period. Shnoop - you have lost me (and many more) as a customer for any future purchases with you...
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Thank you for getting back to us. At this time, it has come to our attention that you have since filed a dispute with PayPal. We will notify PayPal of our intent to issue you a full refund once the merchandise is returned to us, irrespective of your plans to give them away as gifts. Furthermore, being that we have offered you the option of sending it back at our expense for a full refund, it would be in compliance with the provisions laid out by the Better Business Bureau for dispute resolutions. Finally, because you have purchased two (2) Sandisk MP3 players, a 20% partial refund on both orders would total $14.16. If this amount is acceptable, we ask that you kindly rescind the PayPal dispute, so we can have the partial refund processed on both orders. Please don't hesitate to email us back if you have any further questions.

Regards,
The Shnoop Team
www.shnoop.com

On Thu, 2009-07-16 at 00:10 -0700
None of the options really appeal to me.
These mp3 players (Sansa Fuze) were to be gifts for my upcoming trip in the next 2/3 days.

1) I fail to understand that such a grave error was made and Snoop did not inform/contact the customers. If it was a sincere mistake and apology, I would have expected an email immediately to all the customers affected by it and not wait for those who bring the issue to your attention and write back. "Shnoop failed me big time on this expectation".
2) I am a new customer and am very disappointed with this unfortunate incident and the resolutions offered. At this time, I may proceed opening a dispute with Paypal or my credit card and/or with BBB.
3) Please let me know if you are in a position to replace these mp3 players with the new one (as was listed and should have been in the first case).If not, please let me know if a reasonable credit can be offered (something like $15.00) back to the form of payment that was used.
4) An early response/resolution would be highly appreciated.
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All they're refunding is the overpriced shipping they charged. They're still getting almost the full amount for the Fuze.

Finally it seems they've contacted all customers about this issue. It may not be the best remedy they're offering, and it did take them quite a while to come around, but they have at last done the right thing.