As a buyer I would never try that on someone.
I once had a top that arrived with a stuck zip I couldn't use. The seller probably didn't test it, but I paid the return postage and they refunded the purchase price.

If you personally packed the item and know that this is not the condition in which it was shipped do not issue the refund or only offer 50%.

Even PayPal has an appeals button after they rule in favour of the buyer (as per their standard practice since they care more about their reputation as a financial institution than actually researching the claim, but thats a different issue). Anyways if the item arrives back damaged and not in its original condition as you say you are not obliged to refund and the buyer has to wear the cost.

It doesn't matter if we are buying or selling, we should just be responsible human beings that take responsibility for our actions.

Good luck!