In your position, I would accept the return and get the item back.
Ebay will take the buyer's word that the item is not working. If you get it back and their claim is false, you can, if you wish, report them to Ebay for abuse of the Money Back Guarantee.
However, buyers are also allowed to return items if they arrive after the latest estimated delivery date, so you are probably liable to accept the return and refund your buyer anyway.
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard, Danish philosopher (1813 - 1855)