FYI you are permitted under E-Bay policy to deduct from a refund if it
was new/unused and has been returned used. That includes if the buyer
removed the cellophane factory seal (not all fragrances have a factory
seal). Or if the buyer has admitted to...
Question: Did you use a USPS shipping label generated by E-Bay? Or did
you make a homemade shipping label, take it to the post office, and
manually enter the tracking#?
What you could do is just cancel the order after communicating with the
buyer. Relist it and revise your listing to offer the upgraded shipping
so they can re-order it.