All reimbursement should happen after it is in your hands but if you wish to go ahead and send her the return shipping money...
As for the rest like you said wait for item to be returned then refund and Send a cancellation request to the buyer and when buyers accept you will receive all fees associated with the sale ...
Send cancellation request is just like filing unpaid case except you pick mutual cancellation instead of unpaid case ...
She does not open a case unless your being a tool about it and your obviously not so ya ..
Send return shiping $$$ Tell her upon the return of the item you will refund and once you refund you will send a cancellation request to the buyer she will receive message in ebay messages then she will have to accept for you to get your fees back ,,,