If the buyer was refunded and you did not ship the item, you would not enter an actual cost basis for these 2 items. If you did and then added an expense, you would be decreasing your income too much.
If even though they were not shipped, your 1099K is showing that you received payment but they never showed the payment reversed anywhere else on your 1099K, then you would enter the exact same amount that is showing as income as an expense to erase that income.
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