[pxl_rip]

i receive an email that they cannot refund because i used my own label.

Ridiculous.

As per their message below, they couldn't provide a label, hence you did the right thing by using your own. How else could the return have taken place? Via a carrier pigeon?

as per they instruction they couldnt give the prepaid due it was an international return

Is there any chance i can lose my money?

Not at all.

Request an escalation on the grounds of what I've stated above.

First of all thank you for your support.
I don't know If you have read my edit but I added that under their email days suggested me to contact the carrier to open an investigation with them.

The thing that feels Unreal to me is that it is a legit return and their suggestion to open an investigation with carrier doesn't make any sense since the tracking code shows that the package was correctly delivered to their warehouse