Check if your imei is intact, perhaps you could flash an FTF file which will replace the OS so back everything up first.
Make sure you are inserting the sim correctly (i know you probably are but it's worth checking) ones the sims in the phone it should reboot, could be that the contacts which hold the sim aren't raised enough, don't bother fixing them just take it back if that's the case, if the sim has been inserted incorrectly then theres a chance that the contacts may be bent and if that's the case then your warranty will be void, but in all fairness it sounds like a dodgy phone rather than any of the above.
I'd still do the FTF flash anyway, it's probably the best shot you've got, oh and i've noticed that some peoples phones will read sims and others won't so the fact that it works in yours and not hers although weird, isn't conclusive. Try another sim too.
Phones: Moto 888 - Nokia 6110 - Nokia 3210 - Nokia 3310 - Nokia 8210 - Samsung e250 - Sony F305 - LG Viewty - G1 - HTC Hero - HTC Desire HD - HTC Sensation - Nokia Lumia 800 - HTC EVO 3D - Samsung i9300 - Asus Prime TF201 silver - HTC One - Galaxy Camera - Z1