I don't think they should retain him. He's a league-average player who gets all his value from his bat, and players like that get overpaid. He'll probably command something like 3/40 on the market, and you should be able to add 2 wins for cheaper than that. Someone like Nori Aoki probably signs for 3/20, will give you the same number of wins, and you keep the comp pick when Melky rejects arb.