The only cost might be UPS were already paid and you'd lose $120 on throwing that label in the dustbin.
A label is fully refundable up until the time the UPS driver scans the package. There is no excuse for not offering full refunds as promised up until the time the package is picked up.
UPS labels and Fedex and DHL labels are not charged to the customer until they have been scanned by an employee or a machine at a depot.
Anyone you implies otherwise is lying to you.