Just give your vendor a call, they will replace it, no problem.
Although there is a small chance that it is installation technique, rather than a defective SODIMM. It's worth trying to reinstall once.
Insert the RAM's connector pins into the socket while the RAM is tilted up at a 30 degree angle. You must apply moderate pressure with your thumbs on the top edge of the RAM WHILE it is at the 30 degree angle, to properly seat the contacts into the socket -- THEN pivot it down to the horizontal position.
You should see none or very little of the gold contacts visible. If you see more than 1 mm of contacts, you don't have it fully seated into the socket, remove it and try again.
Improper installation is the #1 cause of memory errors in Apple laptops, because their sockets are quite tight.
Note: The PC2700 module is appropriate for all 12" G4 powerbooks. The 867 nominally took a PC2100 module, but the PC2700 is compatible.
Thanks
Trevor
CanadaRAM.com