Alright, second time was a charm. The agent was equally as confused about the situation. However, her confusion was in regards to how she was going to issue the refund rather than whether she was allowed to issue the refund. She quickly decided she was going to "have to do it manually". And she did and told me the refund would be issued in the form of travel voucher credit via the mail. Works for me, except for the hassle of likely having to book at the airport once again.

Thanks all.