Yes. There are laws in place in regards to the sale of goods. If the goods are not what I ordered, then I MUST get a refund and the goods returned. In my case, it wasn't worth the company returning the goods
What you did was tell a customer to still pay for something they did not want. Hence why they were angry.
I do suggest you look carefully at the terms and conditions of running an Amazon account, especially the returns policy, so you don't have this problem repeat itself. You may have to get the goods returned, if you don't want to offer them for free, if it's within the returns policy. Do contact Amazon. Your returns policy may take precedence.
Perhaps others will be able to give you more information.
When a person doesn't want a product, they expect a full refund and not a partial refund. They also expect the product to be returned.
I'm sure Amazon has a returns policy, which you may not have adhered to and there maybe certain laws in regards to the sale of goods and services.
I remember I bought some brackets for an aerial installation from Amazon. The brackets I received were the wrong size and the company didn't have the correct size in stock. The cost of returning the item was more than the cost of the item. So the company gave me a full refund. I still have the brackets.
You made an offer the customer didn't find acceptable. Rather than waste time having dialogue with you, they used Amazon to deal with it.
I contacted the company, told them the brackets were wrong and I was going to return them. They made me the offer and I was surprised. Not everyone is honest.
So there was no bad feedback, because they made me a good offer, plus I was a good Amazon customer.
I am speaking in regards to the UK Amazon site, but the US one maybe similar.
Fom what I understand, there wasn't a problem with the quality of the item or its suitability. The customers simply changed their mind after the product was handled, packaged, invoiced and shipped (hence generated cost for the company). I only know your side of the story, but if it's accurate they should have accepted the partial refund.
I leave negative comments if the item is faulty/damaged, if it doesn't match the description/pictures or when the service is unacceptable. I think that if I ordered something and then changed my mind after it was shipped, I wouldn't be so quick with the bad feedback.