Ashley,
1. The law that applies to your customer is US law
2. The law in UK where your customer is that personalised items are not refundable unless they are damaged. All online items can be returned for any reason but personalised items as well as other items e.g perishable food, underwear etc are NOT returnable nor refundable. She can refuse the item and it can be returned back to youBUT you still do NOT have to refund her - Here is the UK government website that clearly states this-
https://www.gov.uk/accepting-returns-and-giving-refunds3. The approach I would take is not to quote the law to her but instead to get your items back, which will happen if she does not pay the customs charge and you have your address on it. I would then inform her that you have received the items, they were not subject to refund but you would process a partial refund on it (e.g 50%) as a gesture of goodwill and to cover your costs. Of course if your costs are not covered, I would not refund. You can opt to refund and take it as a loss but it is not a good idea given the circumstances in my view.