You will have to refund the buyer in full through the case or return request which the buyer opened (or should have opened). Ebay has to believe what the buyer claims, and ensure they're fully refunded as per their Money Back Guarantee (which you agreed to comply with when you registered your account). Only a judge can decide whether a buyer is a liar or a scammer. If you don't refund voluntarily, Ebay will force the refund and slap a damaging defect on your account.
Once you've refunded the buyer through the open case or Return Request, you can report him to Ebay for abusing the MBG (via the 'report' button on your 'leave feedback' page) if you're quite sure that's what he's done (could the item have developed an intermittemt fault during transit, perhaps...?). A few of those from different sellers, and his account will soon be toast.
You can take legal action too if you wish and if you're quite sure that the buyer has in fact defrauded you. Start by sending him a PayPal invoice, telling him that there is no fault as claimed, and that he therefore has 7 days in which to make cleared payment of the return costs, or you will be forced to take further action. If no payment is received within that timeframe, send him a 'before action' letter by Signed For post, telling him he has 7 days from receipt of the letter in which to make cleared payment, or you will be reporting him to Action Fraud (the police's online fraud unit) and taking him to Small Claims court to recoup your loss plus all court and other fees. If still no joy (unlikely, as this is usually enough to put the fear of god into small-time scammers), take him to Small Claims court if you wish. Easy to do, and the process can be started online.
@gary_uk22
