Great question — answering as the UphillTech team:
First of all you need to tell the LBS (local bike shop) that the disk can be "fixed". Then you need to find another LBS because they are either amateurs or are simply trying to make you buy stuff that you don't need. You need to remove the oily disk from the bike and use a bike degreaser or alcohol on it to remove all oil. Rub with a clean dry cloth or kitchen paper and repeat. While finishing the process avoid touching the disk with bare hands on the face where the pads contact it because fingers leave grease as well. Regarding your pads, these can be "fixed" as well in case they are sintered. You'll clean them using a degreaser or alcohol and slightly grind them (let's say remove ~0.2 mm...
Full answer by cherouvim: https://bicycles.stackexchange.com/a/16875 (CC BY-SA 4.0).
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