Explain what has happened to your buyer. If you are lucky they will agree to cancel, which automatically issues a refund.
Unfortunately you can't guarantee they will agree, in which case you must use Out of stock" To cancel, which will place a black mark on your account.
You may also get a negative feedback.
I'm not sure about the postage label you have generated, I feel you ought to be able to void it but I'm not sure. Hopefully someone will pop over and clarify this.
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