Your refund policy only applies when a buyer changes their mind, if an item is not as described then they can ask for, and should get, a full refund any time up to the 45 day limit if they have paid with Paypal and anything up to 12 months later if they have used a credit card.

I would ask for a photo and if it is indeed faulty I would just refund in full and tell them to keep it.

You should have enough to cover the occassional loss of postage costs built into your business model and for a damaged item I would never ask for it to be returned unless I could fix it and re sell it for more than the cost of return postage which I would pay.

If they cannot or will not provide a photo I would ask for it to be returned and would make it very clear that if it turned out to be faulty I would reimburse the return cost.