If she opens a dispute within the Paypal stipulated 45 days, she will be required to return the item to you by trackable means - Registered or Click and Send - at her expense.

Once you receive the item and it's the one you actually sent, you advise Paypal of this and the buyer will be refunded the full amount they paid of $16.99. But they will be out of pocket the return postage. So there is room for negotiation there.

Be aware that Paypal will place the $16.99 on hold when a dispute is opened.

Now would be the time to negotiate, IF you think the buyer might have a case. Otherwise stick to your guns, and let the case play out.