Seller offered refund for item damaged prior to despatch

Bought item with 'free postage' using PayPal for payment. Seller notified me of despatch and then emailed to say item damaged prior to sending to me, so they would not send it, did I want a refund? I confirmed I wanted a refund, but value of the purchased item identified in the message is less than purchase price. The order reference is the same. I've asked seller to clarify why there is a disparity in the purchase price but I've received no reply. What should my next steps be?

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The Seller hasn't actually Refunded your Payment then? Open an Ebay Item Not Received Case one day after the last Estimated Delivery Date for a Full Refund.