I learnt a long time ago & unfortunately the hard way, that more often than not, it's not the problem that is the problem, it's how you deal with it that's the problem! (if that makes sense?)
If the client is wanting a free treatment & refund then do it. Now is not really a time to be getting arsey about giving away a bit of time & a small amount of product cost.
It's surprising how far just an apology can go. We're always told not to apologise because it makes us sound liable but long story short, I got sued a few years back after a client reaction (not for an ELT) and all because I didn't apologise & phone after a couple of days to see how she was.
I'm sure many lessons for all of us can be learnt from this, not least to make sure we all fill in our record cards correctly & show some empathy to clients!