Why wouldn't my iPod Have a reset option to reset to factory settings I believe I received a display iPod it came with games you can't play if you click on them it says for demonstration only and I can not download any apps or games wth do I do

i bought this 3 months ago didn't open it or anything I know big idiot but it was for my daughters bday today she opens it and stuck to the back of it was a yellow sticker saying display model. What..... Ok so we charge it she can't wait to download her little grs and play and nope it won't let me download any apps or games so I tried to sync it with her brothers and no it won't so I google it  to find out how to reset to factory settings looked so easy should have known I go to settings then general and yep no reset option so I try the iTunes thing with the laptop nope didn't work I am ready to try the hammer you know where you continually beat the darn thing till you feel better ugh please any suggestions would be so appreciated

You should be able to force it into recovery mode and restore it. Provided, that is, that it's not also activation locked. If there's an iCloud account set up on it with Find my iPod enabled, you're pretty much hosed.
You may want to try contacting Amazon to see if you can return it. Was it actually sold by Amazon, or by a 3rd party? Amazon is getting to be as bad as eBay any more with all the 3rd party sellers.
Amazon is NOT an authorized source for any Apple products. What you got was, as you have already figured out, a demo model. It was probably either liquidated along with the rest of the inventory from a brick and mortar retailer that went bust or possibly even stolen.

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