'Spent ages on a chat with an agent who assured me the  label would auto cancel if not used & I would get a refund.

What a hassle & worry.'

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 Did you pay for the *unused* postage label or did the buyer?

If the buyer bought the label and you don't use it (i.e. post another way) then , yes, the buyer will get an automatic refund of the unused label.

If you, as the seller, bought the postage label, the refund will not be automatic.  You will have to 'request' the refund 🙁. 

(there doesn't appear to be a technical reason for this; it's just another hurdle placed in the way to try and persuade sellers to use the Simple Del system)