Have you asked the buyer what they would like to happen, see what they say. Put the options mentioned above to them and take it from there. i guess it would depend on the value of the item as to whether you send a replacement or just refund for it, if it`s a £5 item and would cost that much to send a replacement, then if it was me, i`d just apologise and refund for it, but it`s your choice dependant on what the buyer wants to do.