HAZMAT returns are where amazon has flagged the product in the return as potentially containing hazardous materials, or more realistically items that might not be able to be returned via Royal Mail owing to their prohibited items list.

We get this for blow torches on the assumption they might contain butane. But i could be batteries, or certain liqud goods. This is likely the list amazon work from, but as noted, the page only contains examples.

Generally speaking, if its HAZMAT, the customer isn't provided a prepaid return label. In this case, you need to normally approve or reject the return itself and if the return reason leads to seller liability, you would need to supply a prepaid return label - otherwise you just supply the return address.

At this point - you do not need to continually communicate with the customer especially as I don't think refund at first scan would apply.

If they return it, you check it, you refund

If they don't return it - they don't return it.