You do have to refund the entire amount paid, including the postage. (Unless you use Simple Delivery when Ebay collect the postage amount and provide a label.)
You can have a returns policy where the buyer pays postage to send 'change of mind' items back to you.
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard, Danish philosopher (1813 - 1855)