Hi there, from memory!   if an item is returned damaged, incomplete etc, you have 3 days to refund the buyer, but may withhold up to 50% (?) of the original sale price.  If you refuse or fail to make a partial refund and ebay is required to step in, then they will refund the total amount.  I don't know if such a decision can be appealed, given as the refund time frame was not met.

Happy to be corrected!