What is the role of で in the following sentence?

Question

The following is a sentence from a reading comprehension exercise. The context is a 返品カード. I wonder what role で plays below:

返品理由で当てはまるものを選び、アルファベットに◯をつけてください。

a．サイズが合わなかった。

b. ...

I have two guesses.

1. で here is the te-form of だ. 返品理由 and 当てはまる both modify もの.
2. で is a particle and means “as”.

Which (if any) of the above would be correct?

Answer 1

I think you can read the sentence as 返品理由の中で当てはまる… so で plays "location" role (inside the list, choose corresponding...).