Let it go but ask them to bring the shirts by after they wash them a few times to see what they look like.
We do the same. We never compete on price.One question I always ask my customers. If you can get it at that price why are you here? I don't ever try to beat silly prices. I charge what I charge and I have never looked back. I do quality work and charge accordingly, and I have continued to grow by word of mouth. Know what it cost you and what you need to make to be profitable. I moved out of my house 8 years ago and am doing great!