Dissapointed buyer, item malfunctions experience?

I sold a nice CD player that functioned perfectly up to the time I shipped. Buyer plugs it in and only one channel works. Box looks like no mishandling occured during shipping.
I spoke to the buyer, ( really nice guy). I also felt really bad about the item not functioning properly. I was going to refund all ship cost and payment.

He actually wanted to keep the unit so we agreed to have the unit fixed at my cost and I pay for ship to and from authorized repair shop.

This is the first time I have had to pay to have anything fixed that I have sold. I have been lucky and should be grateful because every transaction is a gamble.

I am curious as to what others have done in this situation and what possible pitfalls might occur during the repair process.

What has been your experience and is there actually a set of rules we should follow when this happens?
thanks
Matt