Toys R Us will not exchange or return defective item. Eugene, Oregon

My sister is going to have a baby is two weeks or less, mother in law bought her a back pack diaper bag that was on my sisters baby registry.  When my sister tried to put baby items in the bag, there was tear in the bottom and things would fall out.  She tried to take the bag back to Toys R Us where it was purchased  and she was told that because it was not the same color as the one she chose on her gift registry, they would not return or exchange for a different one, unless she had a receipt.  um... this was a present AND it is defective.....   Manager John (didn't give a last name) was less than sympathetic and told my massively prego sister that  he could try to look up the transaction with either a phone number, or credit card number. (who gives out their CC number) He also said if they were not happy with the return policy, to call cooperate and complain.  And she did, they said they could not bend on the return policy, she had to have a receipt... They suggested that she call the manufacture and see if they will replace it for her.Called the mother in law.. of course, she paid cash and threw the receipt away. 

What kind of crap policy is this?  An obviously defective item, with the tags still on, and because it was not the color she scanned 9mo ago.  Something there needs to change.