If you took Paypal in payment, you do accept returns. Posting that you do not only means that some customers will pass you by as being difficult and others will start a Dispute that will affect your Rating as a seller, rather than try to work things out with you directly.
Tell your customer to return the item for a full refund. Remind him that Surface may be cheap but can easily take three months, and you recommend using Air Mail.
While he should be using a tracked/delivery confirmed service, this is not for your benefit but for his. And since you intend to treat him honestly, the more expensive DC service is his choice. You are not required to refund return postage.
DO NOT REFUND UNTIL YOU HAVE THE ITEM IN HAND, have inspected it for the problem (there may not be one, don't get upset about that) and confirmed that it is the item you sent.
Then refund the original payment including the original shipping cost. Tell him you have done so and ask for positive feedback.
And get rid of that No Returns. It is not actually useful, for the reasons above.
