They might put you on their blacklist if you deny, but I think it's their own mistake. Never seen this before though, most shops take their loss.
I don't know which item you ordered, but if it's a bargain I would pay half of the extra shipping costs to avoid any problems with a blacklist or so.
On the other hand, we all make mistakes, I also had it once on Ebay and charged the wrong amount for shipping. Very glad he was willing to pay.
