I wash all clothing no mater where it comes from first off........This is a tough one for me to decide on what i would really do, I know that a customer supplied shirt is to be a gamble due to the technicality of how it was washed etc , But for me whether or not they supplied the shirt or not ,the main issue was with the transfer which in turn ruined the product not the clothing having an issue. I personally would have to replace the customers clothing .It was not the clothing that caused the issue in this matter.
What if you did a decal on a vehicle and for some godly reason the adhesive ruined the clear coat due to a mix up in the chemical adhesive ( Not that this would really ever happen but just an example) .The material you supplied to put on the vehicle ruined the paint, Does that mean your not liable for fixing their paint job ? Or tell the customer since you supplied the vehicle i wont take care of you but i will give you a deal..lol Sorry but whatever product im supplying that ends up having a defect to cause an issue falls on myself or the manufacturer who supplied the item... I would have to eat the cost of the shirts and put it on the supplier if possible, otherwise eat it and move to another supplier,, But what do i know... lol..