I've just sold an item that was listed as delivery, the customer wants to collect, I've already got a prepaid label, but I want to refund him the postage back but obviously I don't want to pay it from the item price, any help appreciated thanks
Your best bet is to cancel the transaction (a full refund will be issued) and relist as collection for the buyer to buy and pay again. Otherwise the buyer won't receive the QR code that you need to prove they have the item.
Discuss with buyer first then click on the dropdown menu arrow alongside the item on your orders page and select Cancel order > Buyer asked to cancel.