library book

I checked out a book from the public library, and lost it soon afterwards. I found a brand new one online for a third of what the library is now demanding that I pay them. They say that they don't allow the person to purchase a replacement item, they MUST pay the library what it asks, along with a fee. I have no problem with the fee, but if I can get a brand new replacement online this much cheaper, shouldn't they have to accept it? After all, isn't this all they would have gotten if I hadn't lost the book, and had returned it as usual? This sounds like small claims, and my understanding of that is that the injured party is ONLY allowed to be made whole. "Whole" would have been the return of the book, NOT money. They've sent me a collection notice, and I don't think that I should have to pay their total when I can get a brand new replacement item for so much less. What can I do? (I'm in Tennessee.)

You are correct.

They would normally lose if you go to small claims.