You are not supposed to issue a refund until the item comes back to you and in the original condition. Buyers are scammers. They send back a used one and keep the good one you sold them, then get a refund.

Sellers are screwed on Ebay, yes. You can appeal any decision that goes against you. Ebay used to be fair but changed their policy a few years ago.

You are correct. Sellers have to assume some risk. Not all transaction will go smoothly. All retailers have some merchandise losses. Learning how to pack properly will reduce damage. That is a weak spot for sellers.

Ebay seem to think its always the sellers fault,i have stopped selling on ebay for that reason

You don't refund until AFTER the item is returned.

If it has been damaged, you need to work out if it's the original carrier, the buyer or the return carrier who is at fault

If your a seller and made a refund for whatever case may be, and you receive your item you sold in the first place broken or if you don't receive it at all. What should the seller do?

You already don't have the money, the item is broken or you don't have the item. Is it possible to receive that money again? Is the seller basically screwed? Does the seller receive some type of benefit out of all this?

What happens?

I'm asking because I'm well aware that eBay protects the customer very well, but not so much the seller.

Thanks