If the buyer has opened a case for a refund then sent him an e-mail via the case, saying something along the lines of "If you would like a refund please return the item to me in exactly the same condition that it was in when I posted it and I will refund your money in full upon receipt of the item." Once you've done that issue an eBay Returns Label via the case so that the buyer has a means of being able to return the item to you. If you do that then the buyer will have no justifiable reason as to why he refused to post the item back with the label supplied, so long as you ensure that the label is sufficient to cover the total cost of the return postage.
Should you not receive the item back again then don't refund the buyer's money. The buyer only gets so long to download and use the label before it expires, so if eBay were to check the tracking and they saw that the returns label was never downloaded, and therefore never entered the postage system, you would not be obliged to refund the buyer's money as he has failed to comply with your requests in order to ensure that he gets his money back. If, on the other hand, you recieve the item back again then refund the buyer via the case in the eBay Resolution Centre. Once the refund has been issued the buyer will get his money back and the case will close automatically, thus preventing the matter from being escalated to ebay, which would have resulted in the buyer getting a forced total refund and your account being hit with a defect.
In the event that A) the item sent back is something other than the item you sold, B) is returned to you in a condition which means that you can't relist it for as much money, or C) is in such a bad condition that it cannot be advertised for sale then use the Report Buyer function to make eBay aware of the matter.
With regards to the buyer claiming Item Not Received for the item he ordered you should be able to win that case if you sent it via a tracked service and the tracking proves delivery to the address you were meant to post it to.
If the person who bought the item that you sent to this buyer in error has not yet contacted you about the item then the best option would be to contact the intended recipient of that item via eBay Messages, owning up to what has gone wrong and apologising for the mistake. Ask the buyer whether he/she still wants the item and is willing to wait for the item to arrive, in which case you will post the item to him/her when it turns up, or whether he/she wants to cancel the sale. If the buyer of the misposted item is understanding and is willing to give the item some time to arrive back with you then once you get the item back again post it out to the buyer via an expedited method of postage, such as Royal Mail Special Delivery Guaranteed by 1:00pm, which ought to get the item to the buyer within twenty-four hours, and once you have posted the item to the person who paid for it send him/her a copy of the tracking number via eBay Messages so that he/she can keep tabs on the parcel. This should help to reassure the buyer.
Should the buyer of the item that you posted to the wrong address ask for a refund then ask him/her to open an Item Not Received case and then offer the buyer a total refund via the case. That way eBay can see that you have been working with the buyer to find an amicable solution, and if the buyer accepts the option of a refund via the case you can then go ahead and issue the refund without picking up a defect in relation to the transaction.
