Any reputable online store should acknowledge their mistakes and offer to make good on them to your satisfaction.
The person cutting the order was obviously new, untrained, or had a major brain-f**t when they were cutting, or they're in the habit of stretching the fabric as far as it will go.
Either way, I'd ask for replacement fabric, or, if they don't have any more and/or you don't want to hassle with sending it back, a partial refund.
Quoted shipping should be the most you ever pay, this is what you agreed to pay when you placed the order. If the shop or their shopping cart has underestimated the shipping cost, they should take the hit and consider it a learning experience, and adjust their shipping charges for the next customer before she arrives.
That's only fair.
Oh, and to the poster that said the cutter may have been left-handed and cut on the wrong side of the ruler, hmmmm...
I'm left handed and I don't see how you could do that and not cut your hand off. :-)