Dressale Refused to give me a refund for a damaged dress. Internet

I ordered a custom-made gown for my daughter to wear to prom. 

Long story short, when the order was shipped and I tracked the package to the courier's warehouse in my hometown, I saw that the courier had it marked as "damaged." I was told by the courier representative that the package and the dress were damaged. They said the dress had a one-inch cut. I told them to return the package to Dressale.

I contacted Dressale, explained the dress was damaged and is being returned, and requested a refund. They responded with the tracking number. I requested they go back and re-read my e-mail, and said that the dress was damaged and I that I wanted a refund.

They apologized, offered to remake the "wedding" dress, promised it won't get "lost" again, and said they'll use the fastest express shipping.  I told them the dress was damaged, not lost, and that there was not enough time for a new dress to be made, and I wanted a refund.

Then they offered to remake the dress for some future event that I might attend and offered a free shawl. I told them that I wanted a refund. Then they offered to remake the dress and "also change it to be another style of dress for your coming activity." They also offered a 15% discount. So essentially they will make two dresses for the price of one (with a discount!) instead of just giving me a refund for the original dress. Go figure. 

I refused the offer and demanded a refund. They told me since the dress is custom made I'd still have to pay the "cost fees" which are more than 50% of the dress price. I asked them what are cost fees, but also told them I would not pay them and asked what kind of business are they running? 

They responded with a couple of photos of the dress with another offer to remake it. At this point I relented, told them to make the dress, and that I intended to sell it since by then I had no use for it. The dress arrived yesterday, and I will admit my daughter and I think it is beautiful - but it does not fit. I couldn't zip up the last 4 - 5 inches of the dress. It is way too narrow at the top (it is a strapless gown). It is also too long. 

So now I have to figure out what I am going to do. I don't think I can sell it, I can't imagine anyone would have the proper dimemsions to fit this dress. And I don't really want to spend any more money on the thing trying to see if a tailor can fix it. I think I am just screwed. 

Oh, I never got the 15% discount, and there were additional items I ordered with the original dress (garment bag, hanger, and a couple other items) that added to the cost and which were never delivered. Not that I need them now, but it just adds to the overall lousy experience with this company. 

Just beware, their website says they give refunds, but it is not true.