8th generation iPod nano 3.5 quit working. Bought brand new

After maybe 2 month of using, the USB outlet works when playing music, but the nano 3.5 mm won't work anymore. I have tried using it on numerous 3.5 headsets and I have come to realization that it is the 3.5 port on the phone. The iPod nano was a new Christmas present to wife. It hasn't been mishandled or even dropped. It's still scratch less. I was wondering if I am missing something in setting or do I need to use my warranty for it( which I am clueless about using because this is my first time. Thanks

Your problem/s is/are a bit confusing.
First, it is a 7th Nano not 8th.
Second, the USB is working when playing music. Do you mean the USB is only working while playing music? USB connection is used to connect to iTunes and to charge the battery.
Third, the 3.5 mm is not working. I supposed you mean a headset or an external audio output. Do you mean when you connect a headset you cannot hear any sound?
Fourth, it is 2 months old since christmas. So the age of your nano is just a bit over a month not 2 months.
Your clarification will help us at least find a solution. Cheers!

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