I added someone to my buddy list that had a problem with a book  I sent.  It was the wrong type of book.  I tried to give her a credit, but Im getting a message saying that I have to receive the 2 books Im waiting on.  I have a total of 3, why can't I give away the credit?

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Go into your transaction archive, find the problem book title, click details....then you will see a Give Refund button, use that to get around the rule about having received two books.  And it will also keep a record that you did refund the credit.