If I read the e-mail correctly, the demand is for 24 action on your, the seller's part.
Maybe asking how the BUYER will be returning the product within that SAME 24 hours will bring about a further response.
Let's see at that point if they then say they will not be returning the item.
HOWEVER- I still stand by our policy.
"Thank you for bringing this to our attention.
PLEASE feel free to avail yourself of the protection mechanisms that both eBay, and PayPal make available."
IN OTHER WORDS- COMPLAIN TO THEM- NOT ME!
This way everything is in writing. They will have to return- and PROVE they have returned the item before a refund will be issued (most of the time anyway- as that's supposed to be how it works.) As for feedback- if it can be removed for 'feedback extortion' great- if not, move on.