Just state "NO MONEY, CANCEL PURCHASE. SORRY". They should understand
that. Next time, be sure you have enough money BEFORE bidding on, or
buying an item.
Go to purchase history and click on "resolve a problem" in the drop down
menu beside the item you returned. You will have to open a dispute with
eBay and Paypal if that's how you paid. Always keep post office proof
you shipped it back. Complaint must...
He is wrong, but knows he can get away with it due to Paypal's dispute
resolution policy. He is scamming you by misrepresenting his return
policy. You can report him to eBay for false advertising and you can
open a dispute. But Paypal will only refun...