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Don't get your knickers in a knot. Of course you're missing something. Here's how to do it.
Assuming you're in Australia, Apple has a process for direct courier replacement of accesories such as mice and keyboards, referred to as "DIY". That's what you need to do to avoid going to a store.
Despite what you might think, AppleCare need to confirm for themselves that there is a hardware issue with the mouse. That requires troubleshooting over the phone, which requires a support agreement. A support agreement costs money. However, you need to put that money where your mouth is, if you're sure it's a hardware fault. Pay it, and do the troubleshooting. If the mouse is determined to be faulty, and is still under warranty, you'll be refunded the cost of the support agreement. Then, they can set up the DIY shipment f a replacement mouse, comes in a box, you put the faulty one in the same box and it goes back. Of course, they put a temp hold on a credit card until they get the faulty one back.
Not too hard at all.
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