I read your ad. Nowhere there did you give the slightest indication that this might not be a genuine watch or that it didn't work. I cannot for the life of me understand why you did not at least test it to see if it worked before you put it up for sale. And as for your claim that 'you didn't know if it was a replica or not', that is really dishonest form to advertise it as the real thing at such a high price point if you weren't sure. 

You would have been better to put all the details in your ad so buyers could decide whether to take a risk or not.

The basic situation is this. On ebay, a buyer only has to say something is not as described and they are likely to win a  claim. This man doesn't have to prove whether it is Rolex or not. All he has to say is it is not working. You advertised it as an exceptional piece ensuring reliability and style.

Ebay isn't like the old days, you don't get to decide who you will refund or how much etc. These days, ebay steps in in disputes. Once an item is sold, yes, it is still your responsibility till the item is received and the buyer is satisfied it matches the ad.

Let the buyer open a dispute, then you issue a proper return label & you will have to refund in full once you receive it back. Cross your fingers, because unfortunately you have sold in a category where you have left yourself wide open to being conned. You look to be new to buying & selling on ebay, you have an expensive item, you don't have proof it was genuine etc. Some dishonest buyers target people like you. Let's hope that isn't the case here.

If you must sell on ebay in future, start with low cost items.