Sharon Green ordered the pink cake that featured teddy bears and blocks spelling out her daughter, Tahlia Rose's name.
Although Green felt the detail of genitalia on the bear's from Occasion Cakes was "completely inappropriate", the owner of the cake company completely disagreed.
The mother wrote on the cake company's Facebook page: "I was horrified to discover that both teddy bears on the cake had been given totally inappropriate detailing regarding their gender by your cake decorator.
"I find this detailing offensive."
When Green returned the back to the shop in Wigan, she said she was offered flowers to hid the "offensive" area.
Green told the Bolton News that the display model of the cake when she choose it didn't have the crease on it.
She said: "It was a talking point at the christening - everyone was commenting on it."
The mother of two said she was refused a refund from the Occasion Cakes.
The owner of the cake company, Steve Howarth replied to the woman's complaint on Facebook.
He wrote: "I must express my complete amazement at the reason for your complaint… the crease on its stomach is supposed to represent the seam where the bear is sewn together. For anyone to think it is anything else I find incomprehensible - it's a teddy bear!
"I am puzzled further than as to why you still thought the cake appropriate to put out at event and are now demanding a refund."
Howarth said the company has been making these cakes for more than 30 years and has never received a complaint of this sort.
A spokesperson for the company said the seams were used on both female and male teddy bears.
Howarth added: "I feel unable to agree that any refund is therefore warranted".
Members of the public have supported the local cake company by writing on their Facebook wall.
Ross Matheson wrote: "Well done on your reasoned response to the woman complaining about the teddy bear. Sometimes, people are just at it. Your response was perfect and I hope your business grows and grows in spite of her."
Allison Taylor, a woman who is not even living in the UK, wrote: "Well If I lived in the UK I would certainly order a cake from you just because :)
"Your cakes look great by the way and in a way it has backfired on the person who complained about the teddy bear cake. They have done your business a world of good with all the publicity."
Another woman added: "Some people will complain about the smallest things for a freebie."
However, Jeremy Styers agreed with Green and felt that it was inappropriate.
He wrote: "That does look like a vag and 99% of teddy bears do NOT have that "seam" (a simple Google search will show you that very easily). So why you chose to go with the 1% that does, IDK.
"I would have complained as well and as a business it should be expected."
What do you think?