You have two choices, really:
1. Advise the buyer that you will refund fully upon their returning the item (and you are of course responsible for return postage), or
2. Refund the buyer without requiring the item to be refunded.
If the item is still usable, a third option would be to offer a partial discount if the buyer is happy to accept that.
If you don’t provide a satisfactory outcome for the buyer, they’ll almost certainly ask eBay to step in, which means a kick in your metrics and a forced refund.
In terms of your being recompensed by AP, did you take out insurance? Was the parcel packaged so as to withstand the rigours of transport? Whatever that outcome, you can’t wait for that to be resolved; you have 3 business days from the time the buyer opens a refund request – no more – or it ends up being escalated in all probability.
