@cook-it-up
< I believe the buyer broke the item >
That's a possibility. Another is that the shipping carrier broke the item. As a practical matter, it really doesn't make any difference to the outcome. If the buyer opens a Not As Described case, you will refund. eBay will see to that.
Your best choice is to refund the money without getting eBay involved. Send a prepaid return shipping label if you want the item back, then refund when it arrives. Maybe the buyer won't get around to returning it, in which case you wouldn't have to refund, but that's not something I'd want to make book on.
It's better that you don't dispute the return, because then eBay will refund the money – out of your account of course – and let the buyer keep the item anyway. In this instance, if the item is broken, so that isn't significant. But, at the same time, eBay will stamp a defect on your account.
Too many defects, and eBay doesn't tell us how many is too many, and you'll suffer consequences, such as poorer placement and higher fees.
