hey had to warranty it no matter what, whether it had been just a frame or a whole bike. In this case they also offered him a full refund so he took it. It would be slightly strange getting a refund and buying another when they just offered him a replacement.
firstly, never heard of a cash refund being offered in such a situation before so halfords were either mad or generous in offering it, and second as avdave is possibly suggesting, I might have considered getting another (non Boardman) bike through Halfords given the exemplary service they provided him (out of confidence in their support as much as any moralistic sense of loyalty).
The fact your mate took the money and ran shows how little customer service is sometimes valued, and is interesting to read in the context of various recent threads on here (Hope, Orange and Nicolai all had their varying degrees of support and the effect that has on brand loyalty debated).