Yes, but the question is whether they have charged you £35 (not in dispute, I agree with 8yo maths) but also converted your voucher / code into an £5 account credit that you can use at a later date. £35 – £5 = £25 + £5 postage.
I can see both sides, would have been good to apply the credit to the item you kept, and refund you the full amount for the item you returned.
OTOH, if you bought one item for £30 – £5 voucher, and then returned it would you expect to be given £30 ‘cash’ back; seems reasonable it goes back to whence it came and maybe their system just does this automatically.
Anyway, didn’t you get a mug, that must be worth at least a fiver given the size of the ****