noob ebay refund question

Ok I sold a item I owned not the drop shipping side. The item was used and the buyer is complaining about the fact it was used and really didn't read the listing. My listing says buyer pays return shipping. I actually spent a little more on shipping than charged to the customer. IN ebay returns there is option to have me pay the return shipping label with a full refund then when it gets returned it refunds the customer fully which I'm out some money. I'm thinking the right option is a partial refund minus the shipping I have contacted the buyer and haven't heard back but he is in a state with a lot of fraud, I already have a paypal hold due to the 90 day bs thing should I just eat the return or wait for the customer to contact back, I also don't want to loose the refund and the item if he keeps it any advise

click accept return, wait for the customer to return the item, refund

Have you tried to reach an agreement through paypal? Sometimes these people pay more attention to paypal notifications than ebay ones.

I ended up refunding the full amount and see if karma is kind

You didnt get the item back yet?