On a return's page in Store, Approve and Decline, or Record arrival and Close return, are beside the return's number instead of at the top right of the page. The customer's note and your message to them are under Messages.
Close return offers Refund the customer only when you can refund orders and the order has money left to refund, and the refund amount is under that choice. When a step fails, it opens again with what you typed.