Hi @Cat9, sorry this has happened! Go to your reservation for that person ( you can click on it in the Calendar view, for example), then go to "Change or cancel reservation" - in that set of options you can change the price. If they have already left, you can go to the Resolution center and change the price to effectively zero and give them a refund.
I wonder if they are actually expecting a full refund, however. Have you thought of a partial refund, e.g. half the price? It's a bit unusual to expect to sleep during the day and if the guest didn't specify this in advance, you might not be realistically expected to guarantee a quiet space. In my neighborhood the gardening crews come out with their blowers, the planes take off from the airport, etc. You could ask the person what would make her happy - if she insists on full refund, then so be it, but I wouldn't assume that is what she expects if she hasn't already expressed that. I'm not sure I would be able to guarantee a totally quiet sleeping experience during the day, even in my generally calm and quiet neighborhood.