Etsy Seller Questions:
What should I do when I've tried to resolve a customer complaint, but they still seem very angry with me about their order and are unhappy even when I try to resolve their issue?
This is something that will definitely come up with your Etsy Shop at some point. Some people are unhappy, no matter how you try help and fix their problem. Let's say you try to fix the customer's issue, and for whatever reason you can still tell the customer is irritated, annoyed, or unhappy with their order. In these rare situations, I would recommend refunding and cancelling the transaction immediately. A very angry customer is going to threaten you with a poor review. It may have nothing to even do with your product - they simply may be in a bad mood. So I highly recommend refunding and canceling a customer's order in this situation. At the very least, the customer will be happy that they got their money back and not further try to tear down your Etsy Shop.
If the customer already left a 1-star review, and they are not interested in talking with you and resolving their complaint, then I would still refund their order and cancel the transaction. Etsy says that a Review will stay on your Etsy Shop until the transaction is fully cancelled, which typically takes over 48 hours. But even though the review will stay up for over 48 hours, the best thing you can do for your Etsy Shop is to cancel the transaction, in hopes that the 1-Star review will go away. You don't want to leave any opportunity for any Etsy Customer to ruin your overall rating because they were angry and unreasonable. Even if it costs you money to refund someone and lose out on that income, a 5-Star Rating on your Etsy Shop is far more important.
I've only had to do this maybe up to 5 times in the last year, but there are definitely times when you can tell that a Customer is ready to take revenge against you, no matter how helpful you try to be. In those situations I just don't take the risk - I cancel and refund the order, to prevent a 1-star review from staying on our Etsy Shop. I recommend doing the same thing for your own Etsy Shop.