What is the best thing to do when a buyer messages and is not happy with product they have received?

What is the best way to handle this type of situation?  I have never had to deal with this before.  I do inspect and photograph (front and back and tag) items before I list.  The buyer is saying the item is stained and has pilling however I know they weren't as my son only wore them twice from brand new.  I have asked them to return item for a full refund.    What do other sellers do when buyers are not happy? 

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