Beware apple store iPhone replacement program

Beware apple store iPhone replacement program:
We took my daughters broken iphone 4 into an apple store and was told that the damage was not covered under warrany but for only £120 we could get a replacement iphone 4
the problem being when they helped her set  up the replacement Iphone 4 they installed os7 as the opperating system rendering the phone useless as it now runs slow, freezes & cannot use messaging at all etc
we went back to the store hoping they could HELP  &  were told that the iphone should not have these problems & to do a full restore; as it turns out the processing chip cant handle os7 which becomes Very apparent & now the store staff are suggesting that they will upgrade the phone to something newer & give us a £60 discout towards a new phone for something we paid them £120 48hr earlier.
Its not the Apple experience we have all come to love can anyone suggest how we might restore the phone to an earlier opperating system

campbellpark wrote:
as it turns out the processing chip cant handle os7 which becomes Very apparent
That's nonsense. I have 2 iPhone fours and both work just fine with iOS 7. As mentioned take ti back.

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