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To the OP, thanks for sharing this.
As a small business owner, a mistake like this on such a basic transaction, has me wondering about the competency and efficiency of this seller. I mean, this is what you do.
If and when I've made mistakes that may lose us a valuable customer, a simple refund is not sufficient. I would have compensated the OP with a huge discount on a future sale (and a huge apology). Customers want to believe they are special. They can spend their hard-earned cash at any number of establishments. Intl House of Time posting "buyers are the enemy" sure doesn't help that cause. That's just stupid.
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