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Buyer returned item after the return was closed, now what?

Buyer paid return shipping (not ebay shipping) after he closed the return and I now have the package (unopened at this point) and the money . (He informed me, after the package was turned over to the Post office, it was sent). I know ebay says I owe the buyer no refund. This may be a dumb question So how would I make a refund at this point. And should I ? Could he get some kind of reversal thru his credit card/bank after I refund the money ? I was working with him on a possible refund but I guess he just got confused with the system (only 4 feedbacks). I really don't have a problem with the refund. I've been doing this for 20 years and never encountered this. But not sure how to handle it since he closed the return. I could just keep the money, but that's not me. Seems like he  unknowingly opened a can of worms. Any ideas?  $150.00 item  

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