Shipping a replacement to Canada so customer does not pay fees / taxes again

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I'm a US seller and sold an item to a customer in Canada. It turned out to be defective and he sent photos so I could verify. I told the customer to keep the item (not worth sending back to me) and I'd send a replacement. The original value was $160.

Customers are not supposed to have to pay fees / taxes on in-warranty repairs or in-warranty replacements.

How do I complete the USPS Priority Mail Customs Declaration so he does not have to pay fees / taxes again?

I'm 99% sure the correct answer is not to send as a gift, or simply declare some low ball value.

Anyone know the correct procedure?

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