First of all, did you actually say anything in the case along the lines of "Please return the phone to me using the eBay returns label provided and I will refund your money upon receipt of the phone" and then issue a returns label, as you should have done? If you did then appeal the case and explain that the buyer did not return the phone to you, and ask eBay to recheck the case again. If an eBay returns label was issued but the buyer never used it then use that as evidence that the buyer never downloaded the label in order to return the phone to you, and argue that the buyer must have changed his mind and decided to keep the phone. If you do that then there may be a chance that you could get the case overturned and decided in your favour, in which case you would receive a total refund of the money that was returned to the buyer. However, you would only stand a chance of winning an appeal if you acutally asked for the buyer to return the phone during the case and actually issued a returns label for him to use but he never actually used the returns label and didn't return the phone.
In the event that you didn't ask for the buyer to return the phone to you and just decided to wait for him to return the phone off his own back then the buyer probably got the impression that you had no intention of refunding his money and decided to escalate the case to eBay for them to make a decision upon. If this was indeed the case then your chances of successfully getting a refund out of eBay are about as good as your chances of getting blood from a stone. eBay tend to be very buyer-biased and so would have forced a refund if this was indeed the case, in which case your account will have been hit with a refund-related defect. If you rack up too many defects on your selling account then your selling days on eBay could be over sooner than expected.
