That doesn't sound very fair
when I worked in Adams if a customer returned something they'd bought using a similar discount, as long as the orginal amount needed to be spent (i.e. the £30 or whatever) had still been "spent" after the refund it wouldn't matter, if the total came to less than the £30 then obviously the discount would be removed.
I used M&S online to buy Molly some nursery uniforms too, it was advertised as free delivery on school stuff so that made up my mind, when it came to pay though I was only getting 1/3 off the delivery charge, because only one of the three items was a "school" item - the other two were jogging bottoms which were part of her nursery uniform, but I had to pay 2/3 of the normal delivery cost as they weren't "school" clothing, a bit annoying really, and I really had to search the website for the explanation of why this was.
Keep at them, their refund policy is most likely legal, but they will probably refund you if you keep pestering them
Ask where that part of the policy is displayed, it should be at till points or clearly online, and seen at some point during the ordering process (or there should be a link from teh checkout page or somewhere, or a confirmation email)
I've noticed lots of places now don't even exchange things without a receipt (or other proof of purchase), probably because it's quite easy to scam shops without one!