Buyer opened INR after 3 months

I sold a Pokémon card using ESUS shipping in August, and now in December the buyer has opened an “Item Not Received” (INR) case. However, the ESUS tracking information no longer shows any updates because it has been more than three months.

In the INR case, I don’t see any option to decline the refund. What should I do in this situation?

Additionally, if I issue a refund, will this count as a defect on my seller account?