In 4000 hours of dual given, yeah, I've had a few. Most agreed and even expected that more than one flight was needed. Others had no clue or ability to self assess their skills. Those are never fun conversations.
As far as rental checkout vs. flight review, I don't see it as that big a deal. If you can't pass a flight review, I'm not renting you a plane. This is not a business where "the customer is always right". As a flight instructor, my job is to give you the training required to insure that you are safe. But I also have a responsibility to the flight school and leaseback owners to protect their assets. There are two common questions used to describe the evaluation process: "would you let your family fly with them?" Or "if it was your airplane, would you toss them the keys?" Sometimes, it's tough to make that assessment in just one flight. And yes, sometimes it is just a feeling as opposed to a deficiency in specific tasks.
Some common reasons why I have wanted more than one flight for a rental checkout in the past even though the skills seemed to be ok:
1. Pilot is new to the area, and could use a little more familiarization.
2. Transitioning to the G1000. This can easily take more than one flight.
3. Transitioning from carbureted to fuel injection. It's a different starting process, you want to see them do it more than once.
4. Directional control. Sure those landings looked acceptable, but I couldn't quite assess I you are really up to par because it seemed like you were able to "get away with it" because the winds were calm. I need to see what you can do when it's blowing 15 knots, and we just can't do that today.
The worst are the guys who walk in off the street and want to get checked out "in the fastest thing you've got because I'm taking my family on vacation next week". You would be surprised how often we get this. I had one guy attempting to get checked out in our retract. In the course of our first flight, he had forgot to bring the gear up twice and forgot to put it down once. He then couldn't understand why I told him he needed a little more work. He got very ****ed off and stormed out never to be seen again. Know what my boss said? THANK YOU!
Before you label me a hardass, I'm just explaining some reasons why a checkout or flight review may take more than one flight. In twenty years of instructing, I have done many in the minimum time, and don't believe in dragging it out any longer than necessary. I personally don't do it for the time or money, so if I tell someone they need more training, it is sincere.
To the OP, I'd say give them one more flight, and if you still feel like you are being taken advantage of, take your money somewhere else.