Is this a QC pic ?
I think you answered your own question. Keep the watch.
I'd be pissed if I got the watch in this condition but then I have enough rodico to clean a hundred watches like that so I'd just do that and ask for a nice discount from the TD if you plan on getting something else from them in the future. Sending back for exchange is not worth it as the whole job will take about 10 mins...so either do it yourself (it is pretty easy) or find somebody who will do it for you and you ca have this on your wrist same day)
i think a few dollars refund towards having it cleaned by a watchsmith would be the ideal for both parties.
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I intent to clean it myself but my concern is how to remove the stem and re install the stem after cleaned?
If you have no experience, you had better going to a professional watchsmith
ALE