Seems a bit steep to me. If they insist on paying then I would go for a bottle of wine (if you are a wine drinker) or $5 a disc if it were me.
Remember an 'insistance' on paying quite often means a polite "we will pay" with an expectation to get them for nothing.
If it were for friends I would give them away and know that I would get something back in return at a later date.
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