Buyer returned item without approval.

[dangsweetthreads]

My return setting is that I don't accept returns. I just received an item in the mail requesting a refund because of size issue (I include measurements to avoid this). Is the buyer in violation of eBay policy and should they be reported? How should I proceed. I don't mind refunding but don't want to refund the postage I already paid as I would be making an exception in the first place. But I won't even get the eBay fees back since the buyer didn't request the return. How should I proceed?