Do I have to return a refunded item?

I ordered a custom dress on Etsy and took a lot of time and care with giving the seller the right measurement, but the dress does not fit at all. It is clearly not a custom dress made to my measurement. For example, the waist size is 10 inches larger than what I told the seller. All these conversations were documented.

I told the seller it didn't fit and she agreed but said best I can do you is a 30% of coupon, so I opened a "help with your order case" on Etsy. She says that if I get a refund, I will have to pay a delivery fee to ship the dress to her. This would be quite hefty because it would go from North America to Asia.

But, her own store policies says that she does not accept returns. Would I have to send the dress back in this case? Thanks for your help!