I got 2 words for ya, attitude and hormones.
At 11-12 my dd hit this stage. I was ready for it because at 12 my ds had done this.
Their hormones go out of whack, their body is pulling them along a roller coaster. THey will stay like this for awhile!
What I did--make them be nice. They have a snappy comeback, I stopped everything turned and waited till they could have a pleasant comeback. I also made them say something to the other persons face. Not "your hair is a nice color" --they have no control over that. It had to be something like "I like the way you pulled your back with that hairclip today. It matches your clothes very nicely".
Yes it was painful for everyone. But it broke the cycle of older sibling abusing younger one.
No matter how you look at it, they are being very disrespectful of the family and getting away with it. Just dont' tolerate it. And make them learn to keep what they picked at the store--learn to live with your choices. Say maybe 1x a week they can trade, but no more. ;-)
And being disrespectful has no "sides"!
If she were rude to you it would be sad for your younger one to witness it, your dh to witness, so why is it different for her to be rude to her sister and not have an impact on the rest of the family?
If you bought a treat that was $3.00 more for the younger one, that would be taking sides or showing partial love.
Hang in there. You are just beginning this fun roller coaster.