Mine is like that but even more extreme. It has that strange wavy pattern throughout the entire jacket. Looks terrible. I haven't had a chance to try ironing it out, because otherwise it's basically unwearably ugly.
Definitely contact them. This isn't a subjective good will warranty repair to a worn garment. It's a product arriving damaged beyond repair, which warrants a refund. If they won't refund you, you can definitely file a claim with PayPal.