I'm going to assume that you payed your bill online.
Please be sure you READ what's presented to you.
Paying your bill online means that you're subject to whatever they decide to do. It says on the page that all payments put in after a certain time will be processed the next day. That's likely what happened to you.
They didn't have to reverse the late fee. In fact, the representative probably wasn't allowed to reverse it, and thus it didn't happen. They charged you a late fee on the late fee, because you didn't pay them the money that YOU OWE THEM.
That's your fault. If you don't pay on time, you owe extra money. That's how it is. If you don't pay the extra money, you owe more money on the extra money.
Kohl's didn't do anything wrong. You did.