Well, unfortunately, if you don’t provide the services that the buyer seems to have thought they were ordering, you have two choices: Work out, with the buyer, completion of the order according to the services you DO offer… or… cancel the order.
If you choose to cancel the order, yes, your cancellation rating will take a hit. On the other hand, if you work the situation out with the buyer, and find a service resolution, then you don’t have to cancel the order, and the buyer receives work from you that they can use.
It can be a tough situation to be in, especially for new sellers, however, ultimately, you’re going to have to make a decision, and there are always benefits and consequences to every decision you make. Look for the advantage, and make the best of the consequences.