I know you all don't want to hear this, but I have switched over to the Managed Returns option. It cuts out all the BS emails. I ain't got time for that! If the buyer picks the reason for return is that it was the wrong size, eBay automatically deducts 10% from their refund, per my criteria. You still have the option to refund the whole amount if you want.
When I receive notification about the return, I usually shoot them an email something like this. "I'm sorry the item didn't work out for you. Once it is received and inspected, your refund will be processed." The nice part is, once it comes in, you click one button and you refund the payment. Ebay then automatically cancels the transaction and reimburses you your final value fees.
For the return itself, ebay supplies the buyer with a return label for the correct shipping based on how you sent it to them. If it was a SNAD return, the cost of the label is simply charged to your ebay seller account, otherwise they charge the buyer.
I have been using it for about a month and have not seen an increase in returns, and they have been much much easier.
Buyers want to feel secure in their purchase, so it is good to have some sort of return policy. If you feel a buyer is abusing the return policy, simply block them for next time.
Also there is this....which I love......although I think the buyer can still ding you with neg feedback.
"A lenient return policy can work in your favor. If the item still arrives within your return time frame, we recommend you issue a refund. However, if the buyer doesn't ship the item within 5 business days of initiating a return, you're not obligated to issue a refund."
In the end....do what is best for you and your selling flow.
Edited by capnwes - 9/3/13 at 12:56pm