Sears.com Order incorrect and even highest management refused to make it right!

Order# 993873387 Let me preface this complaint by saying that I have been a very loyal customer to both Sears and Kmart for years. I order from this company dozens of times in a year and I mostly have no issues. However, on Nov 20th, 2016, I placed an order on Sears.com for a blow up outside Christmas decoration among other things. The decoration was to be a penguin as this is the one my daughter fell in love with. This is the first Christmas that she will be able to give her input and actually participate so it was very important that we get this particular item. I partially paid with my shop your way points and paid the remaining balance by credit card. On Nov 25th, I received my order via fed ex. When I opened the box, I realized that the blow up item was not a penguin but a Santa Claus. I double checked my invoice and it correctly reflected what I ordered. I immediately called Sears.com customer service so as to resolve this issue. The first man that I spoke with was unhelpful and said that I should go to the store and exchange it for the correct item. When I explained that I am more than an hour away from the nearest store which is why I order online, he said to ship the item back and once they received it I would receive a refund. I explained to him that in no uncertain terms was this good customer service. They got the order wrong so it is their responsibility to fix it in a timely manner. I asked to be escalated to a manager. The manager was not helpful either. She said she could charge my card for the correct item and refund the other item once they got it back which would essentially be me paying for the item twice and tying up money. She offered no resolution or empathy considering this was a SEARS mistake...not mine. I explained the importance of having this item in a timely manner and she basically dismissed it by saying these were my options...take it or leave it. I am super frustrated that I am stuck with an item I didn't order and my daughter is disappointed that she did not get what she was expecting. I fully expected Sears to fix this situation as they have in the past and take responsibility. In the past, they have refunded me, sent out the correct item and fixed the situation immediately. THAT is the type if customer service I expect. This is unacceptable and really makes me consider taking my business elsewhere! I need this item refunded, reordered and rectified asap!!