I have no idea how much money we are talking about but unless it was a very expensive pillow case I would just have refunded the buyer and told them too keep it.  They may very well have left the feedback on receipt and not unpacked and used it for a couple of weeks and then only have realised it was not the correct one once they put it on the pillow. They may have asked somebody else to make the bed up and not have seen the pillow case straight away. Who knows but the fact is the item is not as described and good customer service would take priority over whatever ebay rules were about returns if it were me.