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First bad EBay experience

I just had my first real bad experience on Ebay. I won an IHome IH8 IPod radio via Auction Sniper (thanks AS) and the seller (Empire Liquidators) sent me a non-functioning IH5 (different model number and it wasn’t as described at all). I called customer service and they told me to return it (at my expense) for a full refund. So, I returned it via UPS (tracking) and waited 3 weeks…no refund. I e-mailed twice…no response. I called customer service again and was told, “Oh…I’ll forward this to the accounting department right now for your refund, but we don’t issue refunds until you first leave positive feedback.” Well, I didn’t leave positive feedback and I never got the refund. I made sure I filed a PayPal claim prior to the 45 days expiring (first time I ever had to file a claim). The seller immediately elevated it to a dispute and said, “This item has not been returned as of this date. Therefore, a refund or a replacement have not been issued.”

I’ve done some googling on Empire Liquidators and they’re infamous for retaliating negative feedback and requiring positive feedback prior to issuing refunds (and sometimes they don’t even issue the refund after receiving the positive feedback).

Couple of questions here…Was I wrong to refuse to leave positive feedback prior to receiving the refund? I just feel that if the seller screwed up, my refund should not be contingent upon me first leaving positive feedback (especially when my experience was a horrible one). Also, their response to PayPal of “This item has not been returned as of this date. Therefore, a refund or a replacement have not been issued” really surprised me…especially when you consider that I previously e-mailed them the tracking number, the date and time it was received by them, and the name of the guy who signed for it (and the same information was included in my PayPal claim). Does this company have a chance of winning this dispute? I’ve never left negative feedback, but I really don’t see how I can’t in this case.
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