I have done some selling on eBay, and spent time reading through the support forums to understand how I should handle various situations.

eBay generally sides with the buyer. Malicious buyers know this, and will buy things, and just claim they didn't get them and demand a refund. If you don't capitulate, they file a dispute, or outright report you for fraud. Chances are good they end up with free stuff, and as a seller you're SOL. For cheaper items, it's worth it to eat the cost instead of fighting it.

/\--- I had this happen once, with a buyer from Belgium who bid up an item to more than it was worth. (At the time, no package tracking was available to Belgium - this is why some listers insist on "no international shipping" to this day)