From your previous posts you were seeming to want reimbursement of all fees PLUS your restocking fee.

If I was wrong I apologise, but maybe when you are seeking help on the boards you might consider giving ALL information

That's not at all what I want.. sorry if I didn't explain clearly.

I would like the lesser amount of my fees back, up to the restocking percentage.

The restocking fee in this case is higher than my incurred fees, so I am happy to take the lower amount.

Even though I have previously set the restocking % in the system, I didn't even get an option to refund less that.

The only option presented upon selecting to cancel the order at the buyer's request is to refund the full amount.

When this happens with my buyers, very seldom I might add, I just refund item price only through Paypal and eat the ebay fees however my fees are rarely more than four bucks. For more expensive items I wouuld charge a restocking fee.

If the seller offers free postage then the only way of refunding less than 100% if it is a change of mind ebay request is to charge a restocking fee.

In this instance I think the seller is doing the right thing and the buyer is happy however they are worried that if they just do a partial refund through Paypal for the item price plus ebay fees they will get a defect. That has never happened to me either when I have refunded without it going through ebay or when it has.

Where is the setting for restocking fee, and does it automatically appear in your listing or does one need to add a note stating we charge a restocking fee of blah blah, ect

There's an option now in your Return Policy in Business Policies.

You can set.. No, 10%, 15% or 20%

No need to write it anywhere else, it will automatically show "xx% restocking fee may apply" in the listing header details and again in the Return policy under the Postage and payments tab.

Thanks its supposed to be in the sell section but cant find it there.

You need to have policies set up, I believe. I don't, so I can't offer any further information.