USPS has turned the package around because there is no service at the address shown on lable.

[thr-rkn-eylbcs]

I sold an item and downloaded the shipping label and mailed as usual. 3 days later, the buyer contacted me letting me know that when he went to check out, he noticed that I Do Not Ship to P.O. Boxes (News to me, by the way) Unfortunately he lives up in the Mountains and only has a P.O. Box. USPS does not deliver to the physical address shown on the label. I checked the tracking and it is on its way back to me. I tried reaching out to eBay with absolutely no luck. Any help would be appreciated.

[albertabrightalberta]

If you shipped to the address shown in the order, you are protected.

Although you aren't obligated to issue a refund to the buyer, IMO, you shouldn't keep the money if you get the item back. I believe that you should issue a partial refund to the buyer, deducted the original shipping (since you paid to send it) as well as any fees that you don't get back. 

The buyer needs to update their address in ebay's system showing both the p.o. box and the physical address, allowing delivery to one or the other address.

[wastingtime101]

Before providing a street address at checkout, the buyer should have messaged you to confirm which carrier you were using. They know they can't receive USPS mail at their street address and a few of your listings I looked at do specify USPS shipping. Maybe the buyer wrongly assumed you'd use a different carrier (UPS/FedEx)? They should have asked. They knowingly provided an invalid address for USPS shipments.

You can check your account-level shipping exclusions here:

https://www.ebay.com/ship/prf

I selected one of your sold listings at random: the fedora item 144996594523

It shows PO Boxes are excluded and it shows a shipping method of USPS Ground.

Once the package is delivered back to you I suggest refunding the buyer item cost less shipping.

[ms.rodriguez*]

Once you get the item back,  refund the item cost minus the shipping. Tell buyer, that it is always the buyer's fault if the wrong address is used. IF the buyer wants the item, you need to relist it  and he buys it and when he pays again, he MUST have the updated address.  You can't cancel it because then you lose the shipping since the label was used.    Change your setting that blocks po boxes.  Start a new post if you don't know how to do it.