In the UK it is legal - a seller can determine their own contract of sale. i.e. they don’t have to sell to you on your terms.
Not particularly pleasant but there you go. Your loyalty does not seem to be valued by them, why should you have any scruples in your dealings with them for the future?
Can you pay cash for the one you want, credit of some kind for the other watch and then return within a statutory credit cool off period?
Check their terms and conditions and good luck. Obviously local laws will apply.
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