HI @Mandie3
I absolutey agree with everything everyone has said so far.
One more thing - if you refuse to refund, prepare yourself for a negative review that is fairly likely to follow. I
In this instance I would hold off reviewing them until 13 days and 23 hours so that they do not recieve even more reminders from airbnb to review you.
If they DO review you, and it's negative, but sure to respond, and keep your response very brief very professional and detached, It's highly unlikely these guests will even see your response - they're not the ones you are worried about at this point. It's FUTURE guests who will see your response and you need to come across as very reasonable and if possible, the injured party. Guests aren't stupid, They will "see through" a negative review if you respond appropriately.
Good luck!