Hostel — 65 Miles from Hostel denied lodging because of zipcode

Address:	Chicago, Illinois in Lincoln Park.
Website:	www.reservations.com/hotel/chicago-getaway-hostel

Regarding a denied booking that I booked a month before my stay, at:
https://www.reservations.com/hotel/chicago-getaway-hostel

I did online booking in September 2022, for 3 nights at the Chicago Gateway Hostel, dates October 28-30th 2022.
My debit card's zipcode is 60115 Dekalb, Illinois, and was
verified on their site back in September.
When I arrived I was denied my lodging~!
With my zipcode being verified for payment.
The real kicker is I demanded they refund me.
They withheld $50 in my refund as if I had canceled
the booking to late (within72 hours) before the booking date~!
The cost and injury were extremely real. I had no funds to book
Any lodging on the spot. I became destitute for the 3 days, stuck on account of their policy.
So the zipcode issue: Cook County, Illinois is where the Chicago Gateway Hostel is located.

This is where Dekalb County, my zip code of 60115 is located in relation to Chicago, where the Chicago Gateway Hostel is located:

So I live literally 3 counties away from the Hostel~!
I had taken a 2hr train ride and a 30 minute bus ride
To get to the hostel. I was denied my lodging because
Of a policy of not allowing booking in the first 2 digits of
My (anyones) zipcode match the hostel’s first 2 digits of zipcode.
I’ve hostelled for 50 years and understand the policy.
Yet the Hostel knew I would be denied lodging when I booked it,
And now you know my complaint. I want my refund in full, an apology
And damages. Do I need to goto small claims court?