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Thank you everyone for your replies. I do realize that we were in a bad position to start with, by not having a backup of all of the data on the drive. I accepted that there would be consequences when they said that they had to replace the drive... We stressed to them NOT to do ANYTHING to the original hard drive, just remove it from the computer and give it to us. At this point, I was fully responsible for my losses at that point. No finger pointing. That is the point in which THEY messed up, by wiping the drive that they were very clearly told NOT to wipe. Needless to say, my wife will be keeping her computer backed up from this point forward....

I am going to pick up the computer today, along with the original hard drive which has been removed from the computer. I have received a quote from DriveSavers to the tune of $700-2700. I have forwarded the quote to the store manager.... so the ball is in their court now, will see how this pans out. Thanks again for all of the input and advice, it is appreciated!
If you would like other recommendations I can message them to you. Incase Apple is not footing the bill and expense matters. DriveSavers is the best in the business for sure though.
 
The response you describe from the store manager was excellent, in my opinion. They clearly accepted and shouldered responsibility:

1) New HDD - this means you are able to start using the Mac as soon as possible. - Free repair that you would otherwise have paid for.
2) You keep the old drive - you're able to pursue data recovery without impediment.
3) An offer to pay recovery costs (my guess is they may offer to share recovery costs if they're too high) - this is a very rare offer.

Anything beyond that goes from "make good" to "punitive damages." If you take the punitive damages path, "make good" will be withdrawn, Apple retreats behind the fine print of the repair contract, and you take your chances on success.

As for the reminder (from Apple) that they're not responsible for data loss... That's not BS, that's a statement of a policy and self-preservation that you'll find at any repair shop. If these businesses had to be responsible for the contents of every computer loaded with "priceless" personal and/or business data, they'd need the equivalent of U.S. medical malpractice insurance. And then there's the fine legal point, "How do you prove the value of something that no longer exists, or maybe never existed?" And in terms of privacy of customer data... the safest thing for a repair shop to do is to erase everything as soon as the equipment enters the shop.

You've had enough lectures on backups, but here goes. A key point here is that backups weren't made when they should have, even though you intended to make them. Whatever you do going forward, be sure that backups are not voluntary. (That's why I prefer iCloud backups of iOS devices to iTunes backups - automated backup trumps, "backup when you remember to connect to iTunes" every day of the week.) Cheapest and easiest, just use Time Machine, and leave the backup drive(s) connected at all times. And if the materials truly are priceless, then a second, off-premises backup is a good idea.

And please, do a full backup of the computer, not just the photos, not just your business documents. As Joni Mitchell wrote (and sang), "Don't it always seem to go that you don't know what you've got 'til it's gone."
 
Getting in rather late in the conversation. Your data recovery is nothing that I know about, so I won't comment.

As far as backing up. Sorry to sound very harsh. BUT THE FAULT IT ALL YOURS Perhaps if you look at a good $2000 bill to maybe get some of your precious photo's back will be enough of a kick in the pants to consider a better solution to your backup dilemma.

I personally don't hold much hope to people remembering to plug in a hard drive into a computer to have a backup. I personally do want to keep my files and have photo's and videos that I don't want lost. I have both onsite and offsite backup of my data. I have a NAS that I use for TimeMachine so it sits in a fireproof network closet away from my Mac so even if someone breaks into my house, the likelihood of them stealing the backup along with the computer is next to zero.

I also bought a NexStar USB3 drive dock and some cheep 1tb hard drives and use CarbonCopy Cloner to make a monthly image of my mac just in case. I keep one of these images at my parents house the next town over.


You might look to getting one of the Apple Airport TimeCapsule so you don't have to remember to plug something in and it does it's think for you external to your mac.


BTW: As a side note: I took my iMac into the Genius bar to try and get them to diagnose why my wireless apple keyboard and mouse kept on randomly disconnecting. The "Genius" in the process of testing the machine, wiped my iMac saying "Oops, that wasn't supposed to happen". Needless to say, I shrugged as I knew I had made a full clone of my machine before I left to the store. The issue turned out to be a bug in El Capitan fixed in 10.11.2
 
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