Always notify your seller, first. Explain the damages and ask him how he'd like to proceed. In many cases, buyers don't know if the seller has (or hasn't) purchased carrier insurance, especially from a third-party insurer.
Depending on the item and nature of the damage, many sellers will accept a few clear photos as proof prior to refunding. Otherwise, you may have to send the item back.
If the seller completely refuses to cooperate with you... file an Item Not As Described dispute in the Resolution Centre. You have 45 days from your cleared payment to do this.
Since you paid via PayPal, your refund will be returned to your PayPal account. You'll be able to use their Withdraw Funds feature to transfer it to your bank account, if that's what you want to do. If you used a credit card to fund your payment, the refund should go back to your card... this may take a few days to record with your CC company.
