I did a cake this weekend which went wrong from the start. The great bulge was very apparent...and I don't mean the one around my middle 
Humidity was a huge factor and I ended up having to re-ice the bottom before I took it (didn't have time for the top layer). They acted like the liked the cake but I still gave them a 25% discount because I thought it looked awful and was embarrassed I had to take it. My husband said I should not have given a discount since they did not complain. What do you think?
I am going to add the picture...which humiliates me!!! I remember a thread once where people uploaded their worst pictures....this is definitely mine!
I think you did the right thing.
Don't feel bad you did the right thing, your cake isn't that bad, I'm pretty sure their are worse. But as long as they didn't complain then don't be so hard on yourself.
I can see you had a little trouble with the icing, but overall, the design of the cake is adorable and the bows are fantastic. I just tried making a bow for the first time this weekend and had an impossible time getting it to curve a bit to look more like real fabric so I think you did a great job. You have to do what feels right in your gut and if you felt like 25% was warranted than you did the right thing and your customers were likely very appreciative! We've all been there, just take a look at the pink and purple topsy turvy in my photos to get a little confidence boost, at least it didn't look as bad as mine! : )
I would say that most people do not even notice the flaws until we point them out. Better to have been proactive for customer service reasons, but be careful not to teach people to see the mistakes in your work. I have a friend that critiques every cake I do, to help me see and fix them before they go out... and now that is all she can see on anyones cake.
I think I would have given them a gift certificate for a free small cake, like an 8" or 10", then did my total best work, so they could see what I am capable of.
If that is your worst cake I hate you. 
Ok with the jokes out of the way let me say this, if you felt a discount was deserved that's your call.
I've done that before when it's a noticable issue as a good will gesture. Some times they say "shut up no discount it's fine." and others they say "thanks".
One time a lady refused a discount and demanded a new cake with in the hour because it had to be perfect. Needless to say I told her she could leave with her discounted cake or no cake at all. She left and went to the supermarket and paid for a dry and over frosted cake.
It's an adorable cake with a challenge or two that most lay people wouldn't notice. Even though they didn't complain, you did the right thing. Often rather than complain a consumer will simply never use the service again. I'm sure by being proactive you will very likely be used by this customer again.
Recently, the frame around my front door was needing replacement and I had to finish a cake with NO FRONT DOOR on my house. The humidity here in Fla did a number on the fondant and I just wasn't satisfied. I gave a discount, and this woman has bought 4 cakes from me now.
You're cake is cute! But giving a discount or reimbursing is always a personal decision. If you felt that thats what you had to do ,then you did the right thing. I agree with 2508s42, being proactive for customer service reasons is always good.
I had a wedding cake fall during transport. I was able to fix it but had to add more roses then they wanted and it was a bit off. I felt giving a partial refund was the right thing, DH told me if thats how I felt then do it. They never called about it but cashed the check.
I recently looked on their photographers website and there was my cake!
Always do what you feel is right, no matter what anyone else says.
Aw, your cake isn't nearly as bad as you think. You obviously care about how your cakes look and if you feel a discount is in order then there's no harm in giving one. Every now and then we just have one of those days when nothing goes right but don't let it get you down. Happens to the best of them!
Your cake is beautiful, I love the big bows and booties. You did the right thing, you knew in your heart that the cake didn't feel right to you, even though the guests loved it. If you had taken full price, you would have felt bad. I had what I thought was my first cake disaster this year, I felt awful and offered a discount, the recipient asked "are you sure?".
If it made you feel better, you did the right thing.
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