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How do I allow a buyer to cancel after I entered a tracking number?

A buyer bought a bicycle wheel from me and a few minutes later contacted eBay that he wanted to cancel.  I didn't see the message so boxed it up and purchased a FedEx label thru ShipBikes.com which has lower rates than eBay does with FedEx.  I entered the tracking number as soon as I purchased the label before I dropped the box off at FedEx.  As soon as I entered it, I got a message that said something like "We let the buyer know that it is too late to cancel because you already shipped the item."  Because I can get a refund on the label, I tried to accept the buyer's cancellation but I get a message that says something like "you told us you already shipped it so can't cancel."  The only way I can find to allow the buyer to cancel is to process it as me being the one to initiate the cancellation, which I believe gives me a ding and does not relist the item.

 

Any assistance the selling community can give me as to how I can accept the buyer's cancellation so he can get a refund without getting penalized myself is much appreciated.   

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How do I allow a buyer to cancel after I entered a tracking number?

Did you try to remove the tracking number and marking it as awaiting shipment?

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