If you have communication through the E-Bay message system from the buyer stating they used the item, don't listen to all the doom and gloom people on here.
Last year I had 12 INAD requests total and I successfully fought 9of them, lost 1, 1 was legitimate and I decided to give up on 1, because it was just $7.99 and wasn't worth the effort anymore.
There are multiple paths of escalation through E-Bay, and you will spend HOURS on the phone getting through them. It often depends on the type of complaint.
Example, I sold a watch for a few hundred bucks and then the buyer filed INAD and said it was Rose Gold, and not Gold as described. I was able to combat that one by getting a letter from the watch manufacturer stating that they had never manufactured that model in Rose Gold color and that from looking at the pictures of the actual item, it was clearly Gold. I had to go through 4-5 E-Bay reps to get to the right one to provide that letter too, and probably spent 2 hours online and on phone with E-Bay, plus maybe 15-30 minutes with the watch manufacturer.
E-Bay canceled the INAD and I didn't have to refund the few hundred bucks it sold for, just because some bozo wanted to take my new watch, wear it for the weekend, return me a used watch, and get a free "rental". Instead he became the proud owner of a new watch (that he later listed on E-Bay for sale, and copied my listing, still calling it gold).
The easiest way I have found to combat INAD is to initially be very friendly, and to be savvy enough to understand what is going on. Then you need to manipulate the buyer into admitting they have abused the system, either knowingly or unknowingly.
Once you have this type of communication through E-Bay's messaging system, you can get their INAD removed nearly 100% of the time. Usually with no more than 30 minutes spent escalating through E-Bay (generally by the 2nd CSR). This should be your #1 method before trying others.
There are also some other tactics, that probably violate E-Bay policies on the seller's part, but that can be used to get an INAD closed. I won't get into those, but I learned about them from other sellers on forums outside E-Bay.
You will find that many sellers just roll over to INAD, because everyone always tells them to roll over for INAD. I will tell you it will take some time and perhaps MANY correspondences between you and the buyer, to get an INAD tossed.
It it worth an hour to save an $8 return? No, probably not (but man, I really did want to stick it to that jack hole on that $7.99 fasle INAD) and spent several hours before giving up) But a $300 watch that will only be worth $200 when you get it back used. Maybe worth a couple of hours to keep the full $300.
Also, you will get a negative feedback on many of those that you do get canceled. Sometimes you can get the negative removed, and sometimes you can't. I have worse luck getting the feedback removed than I do getting the INAD closed.
I have always made it a policy to fight INAD that I think are false. I admit that maybe once a year I screw up and make an honest mistake. I accept that and will always make right on that without hassling the customer.
You will also find some categories are more troublesome with INAD than others.
