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Does a Buyer lose fees if a refund is made to them?

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Does a Buyer lose fees if a refund is made to them?

I have Paypal account myself so understand that if a transaction is cancelled I still lose fees.

However my son (working today so I am asking query), has a query.  He sold an item for £800 which was cash on collection. The buyer then paid via Paypal and was going to send a their  courier. My son insisted if it was collection it had to be cash. The buyer requested refund, my son issued full refund.

Buyer is coming to collect themselves and pay cash, however they are saying they have lost £40 on the refund. Why would this be?

My son acknowledges that he has lost I think about £27 re the transaction.    Please advise.