Describe Users/kayvanhaddadan here.
2010-08-16 11:02:41 Welcome to the wiki! Sorry you had a bad experience buying a bike. Based on TrueHatch's comment, though, it looks like (s)he is not affiliated with Ken's, but with Bike Forth, since (s)he invited you to "Come to Bike Forth and we'll teach you how [to fix a flat] for free."
Am I correct in understanding the sequence of events? 1) You bought the bike for $500 2) On your first ride, or at least one of your first rides, you got a flat 3) You took it back to Ken's to get the flat fixed, and they were going to charge you for the fix 4) You complained about the charge, in light of the warranty 5) You were told to "zip it" 6) You decided to return the bike, and were ultimately charged the restocking fee
I don't know the specifics of your warranty, but in general, warranties cover defects in the bike. A flat isn't a defect, nor is selling it with stock tires, rather than adding goo and whatnot. It sounds like they could have been far more polite in explaining this, if they really did just jump straight to "zip it," but it's neither unreasonable for them to charge for the fix nor to charge a restocking fee for a bike that was no longer new. Unfortunately, even though the bike had only been ridden for 40 minutes, they can no longer sell it as new—doing so would be dishonest. That means that they'll have to sell it at discount, even though there was nothing wrong with it. Hence the "restocking" fee.
Again, sorry you had a bad experience, but it sounds like you may have overreacted to what seems (at least to me) to be a reasonable set of policies regarding the warranty, fixing flats, and a restocking fee. —TomGarberson