Upload & Sell: On
Its an interesting world... When I started shooting weddings, on film, we made prints to fit the selected album, and prints for framing. Never considered giving the client the negatives.
Now with digital there are more and more photographers willing to shoot a wedding and deliver the whole batch as JPGs with little more than a quick edit to get rid of the over/under exposed or blurry shots.
Then there are others that understand the craft/artistry of image making that do significant post processing to any image that finds its way off the working disk to a lab, or DVD.
When was doing a lot of commercial photography with film it was understood that the client got transparencies after we edited them for best exposure etc. They never got negatives because we made money selling prints. In fact a B&W work order specified size of film and type of prints.
Now there are customer thinking that the photographer is holding back so they want the "negatives"? After they signed a standard contract, which apparently was not clear. Tough spot.
I shoot weddings as a contractor for several studios, ranging from carriage trade to the mid-range. Only once, to my knowledge, has a client asked for RAW files. It was a stipulation in the contract, and we were required to shot raw for the job. Turns out the groom's parents owned a wedding photography business in another city and the bride was one of the editors. :-)
If it were me, I'd give them their money back if they don't accept your explanation.