What a horrible job of embroidery (as everyone here as already said) but, I certainly would not ask them to fix their mistake. I would be afraid for them to touch the project again. I think your solution is great and also agree that you should send a letter to them and the piece that they embroidered (along with copies of the pictures you took) and let them decide what they 'want' to do about the problem that they created. So sorry for what you are having to go through. Jinnie