Wait until it arrives, then use Paypal to Send Money. You should Refund directly however.
And before the buyer returns the item, make sure he is using the least expensive tracked method. While you don't need tracking, he does, and some services can cost five times the cheapest. (See the comparative costs of ExpressPost and Priority Post.)
You should not refund before you have the item, btw. So this does not slow things down very much.
