Did they send you pictures? Ask for pictures first, and go from there. If they open a "not as described" claim you WILL be forced to refund, but I've also had buyers try to use partial refund as a discount on their price they paid. Where is your buyer located? It says you ship to the US, Bermuda, Mexico, and Canada. Is your buyer located in one of those countries? If not, how did they pay? You can set your paypal account to refuse to accept payment from buyers whose home currency is not the currency in your country. This will stop pretty much all international buyers in their tracks, even if they try to go around your shipping locations in your listing.
If they don't have a fit, I would try to stick to my return policy and ask for a return for full refund. You might just get them back and find out there's no damage to them at all. How do they get a chip on the INSIDE rim during shipping? Is it possible that you missed it? My best guess is yes, it's possible, but it's not very likely that you missed it, since you described the small flaw (straw mark) in the bottom of the mug.... this is assuming we're talking about the Fire King mugs you sold. I don't see how the inside rim could get damaged but no damage anywhere else. Might want to wait for someone with more international shipping experience to chime in here, just to be safe. Stuff like this is why I stopped selling internationally. It's REALLY frustrating when you run into an issue, and eBay's policies on returns REALLY put you at a disadvantage when a questionable claim like this happens.
Jon
