Item arriving late, carrier issue

[thrifty_living]

I have an order that was for an address in Alaska and included free shipping. The item was coming from Minnesota. Meanwhile, he found a cheaper price for the same item and purchased it and wanted to cancel the order. Since it was already sent out, that was not possible so he planned to return the item for a refund. The item was supposed to arrive by Dec 18th. It did not arrive, so the buyer is understandably upset. When I looked up the tracking number on the carrier's website, it shows:

Your package will arrive later than expected, but is still on its way. It is currently in transit to the next facility.

Status In-Transit

December 12, 2018

In Transit to Next Facility

Meanwhile, I also called USPS to see if they could give me anymore detailed information. After waiting over an hour for a rep (they are swamped for the holidays, of course}...the rep set up a case to look into it more and it takes 2-3 days for any more info to be given. I am trying to avoid negative feedback so I offered the buyer a partial refund (half) and he could keep the item (putting me at a loss but its worth my reputation) or for him to wait until it arrives and/or the case info as to the status of the item comes in. I haven't heard back from the buyer and am going on vacation for Christmas Dec 22 - Dec 26. I can still check my messages and such during this time, but I was wondering if anyone had any advice as to what to do? I have never had a situation like this and I can see why some sellers only ship to the 48 mainland states!

Thanks for any help.... I really appreciate advice from people who have had a similar problem or who are knowledgable about return policies and such!

Wendy - Thrifty Living Thrift Store