You NEVER stated you would refund the postage to return the item back to you, (as I read it.)

All you said is you would refund postage and that can mean the postage they paid to get it to them.

So just go to paypal and click on issue refund and refund them the cost of the item and the postage, so the total amount they paid to you which is what would have happened had paypal told them to return it.

Once that is done then send a mutual agreement request to get your FVF refunded.

If they decline it call ebay and they will do it manually as once you issue a refund through the payment they made then it will show as refunded and they will credit you the FVF.