@Danielle - It 's not about being upset over a few dollars.It is about feeling like the shop was padding their revenue by overcharging for shipping. After hearing all the great perspectives how others incorporate the 'handling' portion into the shipping cost instead of the product cost I'm not upset at all. That is clearly how the shop had approached it as well!
I personally factor the cost of shipping materials, packaging, tissue paper, labels, my cards, etc into the cost of the item, not into the shipping cost. Everyone must decide the best way to account for those expenses in their own shop! However, I am glad my customers won't have the same feeling of confusion that I did when they receive a box from me in the mail.