I've had the same problem with my AAA ARC. The difference is that I love mine so much that I wasn't willing to give it up for a week or two to send it back. So I bought another one and just sent it back today.
I thought that maybe the foam had squeezed into the center and was preventing contact, so I trimmed away some of the foam making the hole a little bigger. It seemed to work, but then I had problems again. I changed the foam retainer and cleaned it up real good, and again it seemed better, but I've had periodic problems. Also, when it does work, it sometimes flickers. Not badly, most noticeable when it's dark and I'm trying to read something.
I've purchased 4 of them now, 2 as gifts and no problems with the others. From what I read on the forum, there are very few problems and when there are, ARC stands behind them and makes them good. I have only myself to blame for not sending mine back sooner. I just didn't want to be without one.
The product amazes me. An LED that requires almost 4 volts and 30mA and will run for over 5 hours on a 30¢ AAA alkaline battery???? It looks good, feels good, and is damn near indestructible!!! At $30, it's a deal. At $20, it's a steal!!! I'll be buying more for gifts.
Ken