First of all, although you can choose to have a "No Returns Accepted" message displayed on your listings, when it comes to selling on eBay it actually counts for nothing, as many buyers will just open a case against you via the eBay Resolution Centre and invent a reason to justify why they wish to return the item. Therefore, the best option would be to switch the "No Returns Accepted" message on your listings to say something along the lines of "Returns accepted within fourteen days - buyer pays return postage." This should suffice for change of mind returns, as the buyer would not be able to say that you don't offer returns. If a buyer made a mistake with the item ordered, or simply just changed his/her mind, then it's only fair that he/she should pay for the return postage.
With regards to the situation you find yourself in now, it sounds to me as though you issued a full refund via PayPal. Is that what you did when you issued the refund? If so then not only will the buyer have already received a total refund, but you would have ended up with a defect on your selling account. eBay have no access to PayPal's database so they cannot see that you've issued a refund via PayPal. For that reason, whenever you issue a refund for anything, make sure that you issue the refund via eBay, and don't refund the buyer's money until you have received the item back again. So that you know for the future, the procedure to follow is that you accept the returns request, issue the buyer with a returns label and the buyer then posts the item back to you so that you can issue the refund. The eBay returns label is a tracked label, so if the buyer refuses to return the item eBay will know that the label was never used, as there will be no tracking for it. Therefore, in that case, it's just a simple case of "No return, no refund." However, should you get the item back again you issue the refund via eBay, the buyer's money is refunded to his/her account and you don't end up with a damaging defect or any of the messages that you're currently seeing on your account.
In the event that the buyer tries to make out that you have not refunded her contact eBay Customer Services and explain that you refunded the money via PayPal and that eBay shouldn't need to refund her again. However, if something goes wrong and eBay automatically force a refund, in effect giving the buyer a second refund, then you'll have to appeal the defect you'll pick up relating to the eBay gererated forced refund. However, if you do end up with two lots of refunds going out to this buyer, get onto PayPal and ask them to review the transaction. Explain that you refunded the buyer via PayPal first of all but then eBay forced a second refund. Point out that the second refund was done in error given that the buyer had already received her money back, and ask PayPal to revoke the refund and reinstate the funds back to your account. PayPal tend to check things far more closely than eBay do, so if this scenario does occur then PayPal ought to revoke the extra refund and reinstate the funds into your own account.
