Hi jediengineer,
I’m sorry to hear about your unfortunate experience with Sleepy’s. While they are normally one of the many stores I would avoid (see the guidelines here) … in all fairness a stain or evidence of stain removal is an almost universal warranty exclusion in the industry regardless of the manufacturer.
To make matters worse … the manufacturer of your mattress (International Bedding) also went out of business in Dec 2011 so none of their mattresses have a valid factory warranty at all.
Used mattresses such as comfort or warranty returns can be and often are resold through mattress liquidators or at clearance centers. There are state regulations that govern the sale of used mattresses that vary from state to state but they can either be sterilized and resold or they can be rebuilt using some of the used materials inside them. In most states a rebuilt or sterilized mattress must have either a red or a yellow law tag indicating that it has been sterilized or rebuilt with used materials instead of the white law tag that is on new mattresses. In the more “shady” part of the industry they are sometimes rebagged and sold as new mattresses as well (see post #2 here and post #8 here).
An additional issue with stains on a mattress is the potential risk of health issues from exposure to whatever may have caused the stain in the first place when the mattress is handled.
While they aren’t obligated to do anything to replace your mattress … at least they are offering you something although this type of “deal” would still be profitable for them and would be a way that they can further increase the profits they make from you through the exchange process although of course it would be less than selling you a new mattress.
Unfortunately every manufacturer can set their own warranty criteria and retail stores also have the right to set the terms and conditions of their return or exchange policies (and they aren’t required to have one at all) so unfortunately a lawsuit for this type of issue isn’t likely to have any chance of success if a manufacturer is abiding by the written terms of their warranty for the mattress you purchased.
While I can certainly sympathize with your situation … given that the manufacturer of your mattress is out of business and that even if they were in business a stain or evidence of stain removal would void their written warranty (which is available to every consumer at the time of purchase) you unfortunately have very little in the way of recourse outside of anything that Sleepy’s is willing to offer you or if you are more adventurous perhaps with “mattress surgery” (see post #2 here)
Phoenix