Refunds?

[moxiepuppy.livejournal.com]

So somebody purchased something from me and I shipped it out via PayPal/eBay shipping.
Turns our usps asked for COD collect on delivery. This person has been extremely rude the entire time I've dealt with them and now they want a refund.
Is it scummy to not refund shipping because I did ship the package and usps fucked up?
I offered to reship it once I got it back, but they just want their money. So I'll end up loosing money if I refund with shipping.

Thoughts? I don't want to be a scumbag about this but I can't really afford loosing money. Thanks :/


Edit: Worked it out. Thanks everybody! I apparently used a flat rate express box and didn't realize it. I'm surprised they didn't just go by the actual shipping label, and went by the box instead but I don't ship that often. Going to refund them the total amount when I get my package back in my hand. Thanks everybody for the advice!