I wouldn't use it IMO, esp if they didn't follow the rules.

Don't use it, lay it so it looks like it's part of the quilt when you take a picture, and let them other(s) think their block was used. They're happy, you don't risk getting into an argument with them (since I think life's too short for arguments about blocks), and all's well. Minus the deceiving part ;)

pillows sounds like a great compromise. I know I had sent in a block for a group quilt and surprised when I did not see it in the finished quilt. My feelings were hurt, but I got over it. Since then, I've been a little wary about doing block swaps, unless I "know" the people well.

I LOVE this suggestion!! awesome!

LOL
This whole line of comments is exactly why I don't participate in block exchanges. The first few years I was in a guild I was in several block exchanges. There is always at least one block that just doesn't work. It is hard enough for me to make my own blocks fit together. In the beginning our guild was small and in order to have enough quilts made for our show we took turns making blocks for each other. I recieved one beautiful appliqued block that was 161/2 when all of the others were 121/2. I spent several days trying layouts that would include it. I finally made it the label on the back.
Just this past year the retreat I go on celebrated it's 10th anniversary. We were asked to make a certain signature block to exchange. Of course a few people didn't participate so I recieved an uneven number of blocks. What I ended up doing was using the square in a square method to sash the blocks in order to make them all the same size. I was able to put together a twin size quilt that will grace my bunk at this year's retreat. Once again there is a stray block on the back as a labe.

Put the blocks together on your design wall or floor and take a pic....tell them you will have to wait to put them together due to other obligations....time will fade the question:)I have had this happen to me a couple of times! I even went to a snowman party-cute idea! Everyone had to bring something w/a snowman on it such as a scarf, gloves, picture, etc....everyone swapped out. I got hand lotion for 2 years! Glad it was me and not someone else....but, the person that didn't listen or read the directions sure bellied up to the table to get their snowman:)LOL Just the way it is sometimes. One might be a bit color blind...or....what is a fuscia..might be more purple to some or pink to others...sometimes real specifics help....tag it to something like 'pumpkin orange', etc. Sometimes it just doesn't matter....Skeat

Also, doing swaps (I love that this is a buffet of casseroles-great explaination!) is really important...what can they do for us other then help us grow some blocks of certain colors,etc that we prob would not have made or bought....they force us to possible make something or challenge us to do something out of our safe boxes. When I am in a block swap, I always try to sew something challenging. Why? To force myself out of my safety zones...there is a cut off to push me along...but, to learn something new and take on a good challenge. I always get out of a swap more then what I get in return!! :0)And, I always make a couple of extras while I am at it...so, if a pugly comes...it goes to my pugly box...to hug the other ones:)Someday they will be used...somewhere...LOL Maybe that would be a good thread to start.....what do you do w/your pugly blocks...?LOL Skeat (this is not a hi-jack of topic...I think..)