Seller sent a refund as a payment for goods, can I reject it and insist the refund my original payment?

[WeAreEternal]

I bought an item in early November, and paid immediately via PayPal.
9 days later the seller emailed me and said they were sorry but they forgot to check if the item had sold and had only just seen that it had, and would post ASAP.
But it never arrived, the seller made a lot of excuses and ignored several messages completely so in the end I opened a case.

The seller said they wanted to make a claim with Royal Mail and would issue a refund when and if Royal Mail refunds them.
I told then that is not good enough and I want either my item or a refund so that I can buy a replacement.

The seller eventually agreed, after a lot of debate, to refund and have sent me the money via PayPal, but they have sent it as a payment for goods, and as a result fees have been deducted, the money is a few hundred so the fees aren't a small amount.

Can I refund that payment and ask for my original payment to be refunded?

I don't want to be difficult but I don't see why I should have to pay fees on what is supposed to be a refund.

oh dear, they ballsed up the refund, didn't they?
I am not sure how to clear this up, I would contact Ebay Customer Service and ask their advice. And do it now, you're running out of time (45 days to sort most cases).

well they are silly - you did open a not received case didn't you? If you didn't then sadly you are too late now as 45 days is the limit. If you did open a case then yes do refund their payment - they could have sent it as a gift to avoid fees, but that is by the by. If a case has been opened and they refund correctly then they risk you being refunded twice.

you need to tell them to click on the original payment you made in november and then scroll down and hit refund.

Thank you for the replies.

Yes I opened a case, the seller finally agreed to a refund and has until Wednesday to send it according to the case.

I was just concerned that if I went ahead and refunded the case may be closed and I would end up without any refund while the seller could easily say they sent a refund. Iykwim.

no the case won't be closed - you need to escalate it to get your money back. Have you only just opened the case? If I were you I would refund their incorrect payment now. That payment is totally separate to the case and will not affect it.