If this happens again, or for anyone, please make sure you get the item back in your hand before you refund. Since we are dealing with strangers over the internet, this is the best way to protect you from getting scammed.
For Deb, this will not ruin your business, just ask them to ship the item back to you before you refund them for the purchase. Maybe take this time to review the feedback to see if you can improve your products so they don't end up smeared when they are sent out to the customer. How do you store your frames?
Because buying over the internet is tough since you can't actually hold the item in your hand, customers should always have the option to change their mind. This happens. I have something in my policies that they can return the item if they change their mind but have to ship the item back to me. For changed mind, they get refunded the cost of the item, MINUS the original shipping - but it's their cost to send it back to me. This is pretty standard.
For any returns that are due to breakage or something that is my fault, I refund them in FULL. I've only had that happen once due to breakage and instead of a refund, I was able to send them the item again repaired. They were happy in the end.
Sometimes you have to take these things as learning experiences. Sometimes you can take an unhappy customer and turn them into a happy one. Be prepared for everything and good luck!