I would refund in full and chalk it up as a learning experience. Maybe you can resell the fabric on Etsy or Ebay. When I do quilts or hand quilting for others, if I come up short I never go back and say, Now you owe me more. It was my mistake estimating, it's on me to take the loss.
And don't undervalue your work in the future.$250 - $350 for a king quilt is very low.