If they open a dispute via eBay the seller will be responsible for return postage, even if you don't use eBay postage. eBay will charge the cost to your account I would imagine once the buyer provides a receipt and proof of post back to the seller.

if they open a dispute via PayPal the buyer will be responsible for return post

there's not really a lot you can do, either refund in full without the need for return,

await the return (and hope the lodge a PayPal dispute rather than via eBay, try and get them to open a PayPal dispute but don't mention an eBay dispute)

offer a partial refund

if they were in Aust they would have been able to get the return postage refunded by PayPal but because they are O/S I don't think they can.

you could ask them to supply photos of the packaging if they still have it. You may be able to get compensation if AP deem the packaging was sufficient.