I don't have the money to refund on Ebay?

Someone on Ebay bought an iPhone from me. When they received it they opened a case saying it was damaged. This was not true, because when I shipped it it was flawless and I wrapped it in bubble wrap. Ebay decided in their favor and they are now sending my phone back to me and Ebay says to issue a refund. I have already spent that money on another phone and I refuse to give them a refund on a phone that they bought that was as described. Can I get in trouble for keeping the phone and not issuing a refund? Should I just send the phone right back?

Yes you're in big trouble. No doubt you will never be allowed to sell anything there anymore.

Yes, you are in big dodo, and rightfully so.

You will have to fund your paypal in order to be ready to issue a refund when you receive the item. The decision is made by eBay already, so all you need to do is comply. Don't resend the item.

Not refunding isn't an option, so grandiosely saying that you 'refuse to give a refund' is a sure fire way to get ebay's debt collectors on your doorstep. You use their site, you play by their rules.

Surely if the phone was damaged en route to the buyer you can claim against the carrier - presumably you had it insured? If not, more fool you. You need to find a way to refund.

They will just bill you and you will loose your account. Sometimes they even call collections (and ruin your credit) but it depends on the amount.

"I refuse to give them a refund"

Then you can kiss both your eBay and Paypal accounts goodbye, and roll out the welcome mat for debt collectors to harass and intimidate you and ruin your credit.

But stick to your guns! It's worth your pride to sleep in a cardboard box under an overpass. You'll have that broken phone to keep you company.

Yep, you'll have to come up with the money somehow. Sorry for ya!