Like Lance mentioned, If I return her money and move on, I'll have a net loss of $100 or so on the job (the amount I paid for the shirts), which I can easily make up in the time it would take to reprint the shirts. (Plus there's something about doing a reprint that tends to put me in a real funky mood for the whole day, and it would be nice to avoid that...)
I don't see how the customer can bad mouth me if I return 100% of the payment. She didn't like the shirts so she's getting her money back. That's a good business practice. She can take the returned money and use it it to pay someone else to do the reprint. They need to be reprinted, whether it's by me or someone else, so she won't be losing any more time. The refund makes her whole and satisfies my obligation.
What I like about the refund option is that by going elsewhere she is going to learn that a lot of my competitors don't do the same quality work that I do and many of them charge more than I. I certainly don't want to print for her again, so it doesn't bother me in this case to lose her business.
I'm definitely getting the shirts back as a condition of the refund, and I'm going to mention to her that I'm donating them to a homeless shelter. LOL I love that idea! What a righteous man I am, donating clothing to the homeless.