no protection for the seller then

There's very little protection for the seller if a buyer complains that an item is faulty. eBay never sees the item and its policy seems to be to take the buyer's word agaist the seller's.

However, you should not have had to refund the buyer until the item was returned. It looks as though this may have been your first sale, so perhaps you did not realise that it was up to you to arrange and pay for the return? This is what eBay requires when an item is not as described, whether it was delivered or collected.

If you didn't do this your buyer will have escalated the case for eBay to step in and they will have automatically enforced a refund without the item having been returned. You will probably also receive a defect on your account for failing to resolve the problem without eBay's involvement.