You have certainly been unlucky. Customer support were following the warranty terms which can be found at www.fitbit.com/returns
In there is a clause that applies:
"Any replacement hardware product will be warranted for the remainder of the original warranty period or thirty (30) days, whichever is longer, or for any additional period of time that may be applicable in your jurisdiction."
The offer of a 25% discount is a goodwill gesture and is not required by the terms.
Whether you take it up or not is down to you you and how you feel about the Surge when it is working. If you really liked it then a replacement may be the way forward (albeit at a cost). Otherwise, perhaps this is a time to consider your options. If you like the fitbit experience then perhaps changing to a Blaze may be an option. Of course, if you don't mind losing your data history then there are plenty of alternatives to fitbit on the market at the moment.
Whatever you choose it's perhaps worth one last go at fixing your current Surge. I'm guessing that support asked you restart the fitbit using this procedure:
https://help.fitbit.com/articles/en_US/Help_article/1186/
If so, how many times did you try? It's known to not always work so it's worth trying it at least 3 times.
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