I would not send in that smaller satchel - can you imagine the hoo ha if he gets hit with a short postage charge. OUCH

A shame you have refunded already but I would cut my losses, send it in the correct size bag and put him on your BBL so you never have to deal with him again.

If he leaves a neg, you can reply to it (calmly) by saying Postage costs are dictated by Australia Post not the sellers or buyers - or something to that effect.