high value customer 3rd party return

Hello, Thus is my 1st venture into 3rd party, have been successfully selling FBA for about 3 years. I recently listed about ten professionally refurbished 65″ flatscreen TVs to be seller fulfilled. These sell for $1100 and ship thru Amazon insured for 999 for about $200. They are listed as “USED – LIKE NEW” with a condition description of professionally refurbished, functions like a new TV, shipped in original packaging with remote. I am dealing with a case of buyer remorse here, a person bought the TV, received it, and then asked for a refund under the reason “product damaged – box OK.” The return was auto authorized. Then she sends me a message and complains that she received a used TV. I responded to her message and explained that she bought a used TV that was clearly marked as such, and that was the reason it was priced at 2/3 the price ($400 less) than a new unit. I asked her if the TV was damaged in shipping and if the screen was alright and She says that she doesn’t want the unit because there are scratches on the back of it and it’s too much money for a used TV and sends pics of the undamaged screen and then a corner of the plastuc frame that is not clicked together. I tell her to send the TV back using the label that amazon sent her and I will process the refund when I receive it. Ten days go by, she does not return the TV. Finally she messages again and says that she doesn’t want to ship it with the label amazon paid for, she wants me to purchase a prepaid label. Given that in my eyes it’s buyer remorse I tell her that she should use the label provided, that is Amazon’s policy. She sent me another message saying that she contacted amazon and they told her I would provide a prepaid label for the return. I just got the transcript from Amazon, they did not say that. She told them that I said I would provide a prepaid return label and have not sent it. She again complains that the TV (used -like new) was not (new as advertised on the box.) The TV does have different stickers from the original retailer including model number and the phrasing new on the box, however this was not in the pics or listing, or anything that could have been used to make a purchase decision.

A few external factors – I shipped this and several other units in the original packaging, the same way I’ve received new TVs in the mail. I had an unacceptably high damage rate, so since have started to ship these in custom cartons. It’s really a coin flip if this makes it back in one piece. Also, I feel like negative feedback is imminent regardless of the end result.

My question is, what path should I take the causes me the least loss here? I’ve already paid to ship it. If I pay for her return and it makes it, I can sell it again with a slight loss by the time I pay amazon fees and $600 total shipping. If I pay for her return and it doesn’t make it I’m out the cost of the item plus $400 shipping two ways minus whatever insurance I could possibly claim. If I don’t pay for return I’m out 200 one way plus the possible damage on the return that I cant be sure is insured properly. Plus any sanctions from Amazon that could come from this. What would you do and why?