You have done the right thing in Accepting the Return.  This protects you against the buyer escalating the case.  

The only thing at this point I'm not sure about  - because the process changed recently - is the return label process.  Is ebay prompting you to send one?

Also, I think you need to agree an amount that you are willing to refund the buyer - $8.25 for the cost of a 500g prepaid parcel or whatever.