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That was quick! I've not dealt with Shutl, but presumably if they wanted the damaged item they'd have requested it before paying you.
Going through eBay is the safest option, to avoid the possibility of them doing so when you've already refunded them "informally".
You should get your seller's fees back too.
Scilly.Suffolk
Howard
So Shutl have refunded me the full value - woohoo. I think the buyer can open a return request and select the item damaged option and then I refund him and everything is tidied up?
The value was £90 or so - I guess Shutl won't put in a claim for the item and the buyer just keeps / disposes of it?