That is total BS. If an item in not returned in the same condition as what you sent it in, then it's on the buyer.
Keep calling eBay until you get someone who understands your situation. Insist on speaking with a higher up. Keep calling until you are satisfied. Most people in customer service working for eBay are clueless on how things work. They do not look outside of the box.
Also, post the Buyers's username so he doesn't try to pull that with anybody else.
Good Luck!
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