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Reply to "payment refunds - what would you do"

Nicely explain it to them that you can't control the USPS, if the item didn't arrive on time, it is not your fault.
Secondly, tell them because you are a nice person, you are going to give them a refund minus the shipping fees.
Make sure they also understand that you are going to file for a FVF refund from ebay and will put this transaction into an incomplete status.
Ebay will then contact them to demand an explanation for this incomplete transaction.
Sometimes because of all these hassle, the buyer will just keep the item and will not demand a refund for something that was out of your control in the first place.
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