I have and I was honest about it. I told them exactly what happened (dd was pulling her 2 year old coat off of the rack and broke the hanger loop and ripped the seam) and they said that for any reason we could return it, even if we thought it was our fault. In the end, I mended it myself, because they were just so good about the whole thing and I didn't want to take advantage of them. I went on to gift that coat through Holiday Helpers, although I'm not sure the person I sent it to ever received it. It was a good coat, though. I did return a pair of leggings once because the bottom frayed after just a couple of times through the wash and they gladly accepted the return.
If you feel that it hasn't lived up to the guarantee, then I would absolutely talk to them about it. If they didn't think that their stuff should last a "lifetime", then they wouldn't have the policy in place. They will honor it. I'm sure of it. They don't care if you have the receipt or not. It's for this reason we get almost all of dd's clothes, including school uniforms, from Land's End. In the end, though, you have to look at the ethical side of it. If it was gifted to you, and you are going to get a brand new coat... I would weigh the ethical implications as well as the financial ones.