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Trying to refund a buyer but getting an error

Hi,

I'm trying to refund a buyer for a defective product.  They want to return the item but they live in Kuait and it is cost-prohibitive.  They opened a return request through eBay and I tried to refund them outright to close the issue but I keep getting the error:
"Your refund did not go through. Please add a payment option to refund the buyer."
I see no place to add a payment option.  What do I do to resolve this?

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