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How to calculate refund with shipping costs?

If you sell an item for $10 and it had a shipping cost on the listing for $5, so total the buyer pays to you is $15

the seller then buys a shipping label for $5 and pays a final value fee and is left with say $7.

Buyer then has buyers remorse and wants to return, how much out of the amount paid will he get back?

The gap is quite significant from what the seller receives than what the buyer paid. So if the seller is left with $7, but the buyer paid $15 does the buyer refund only $7 or $15?

What’s the difference if the buyer wants to return as a buyers remorse purchase or a return choosing the item not as described? 

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How to calculate refund with shipping costs?

If the buyer opens a return as a remorse return and you don't accept returns then you don't have to accept the return. I believe if you do accept it then you can require they pay to send it back. If they open an INAD then you will be refunding them in full whether you want the item back or not. 

In either case what fees was taken out of your payout has no bearing on the refund.

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