Personally I'd be after either a replacement (a bit of a pain in the **** sending it back) or reasonable agreed refund of some money or store credit, for a brand new bike thats not acceptable, yeah you could argue that it'll end up a lot worse after a few rides, but you wouldnt accept a brand new car like that, or a brand new TV, why should that be any different.
That was my line of thinking, it seems kind of silly to have to send it back and them then send a new one and all the extra hassle that comes with that (ensuring someone is home for the delivery etc) all over a couple of chips however like you've said you wouldn't except anything else new like this so why should this be different.
I was going to ask if it's carbon (as that could be damaged internally, so an instant return), but then I saw the welds, so know it's ally. Tbh, while it won't have damaged the frame/strength of the bike, I agree with Steve - you paid for something new, not something chipped... If it was marked as ex demo then I could understand, but it's not. At least you're not returning as you don't like the bike/size, you can easily show them the damage, so they should easily/quickly pay for its shipment back.
And, as soon as you get the bike, get some heli-tape and protect the paint/frame with that on the usual vulnerable spots, like the down-tube Also makes it easier to clean...
As above completely agree with what you've said, I'll get in contact with them and get it sorted. Hopefully Chain Reaction are good with this sort of thing. Thanks for the tip with heli-tape, will definitely get some ordered!
Thanks for the reassurance guys, will let you know the outcome.