Amazon does not currently have the functionality to refund any more than the buyer originally paid for the order (price plus original shipping costs). If you would like to refund more to cover the cost of return shipping, it will have to be done outside of the Amazon Payments System.
Amazon suggests you send the buyer a check or money order, offer a discount on a future sale, or buy them an Amazon Gift Certificate. Another option is to mail a return shipping label to the customer so they do not have to pay for the shipping cost. You may also want to contact Amazon to request that they allow refunds that will cover the cost of return shipping.