Buyer purchased the same shoe she purchased a year ago and she returned the old one

"can i process the refund stating she sent the wrong item with 100% restocking fee"

You can do that but take pictures -- LOTS of pictures. Start by documenting everything including the two purchases of the same ASIN.

You can show the multiple purchases on one sheet with red arrows pointing to the dates for emphasis.

Have pictures of the return label so Amazon can see it matched the return authorization.

Then --

I don't have a solution for Amazon allowing theft and fraud BUT if this was shipped using the USPS please report the issue to the Postal Inspectors as mail fraud. If not, report it to the carrier.

ALSO the Government has a site IC3 (Amazon will remove the link if I put it here) where you can report the use of the internet for theft if it was UPS, FedEx or whatever. It is generally used to report on websites but it can be used to report buyers as well if you happen to encounter one of the Amazon scam crowd.

In all cases it at least puts the con artists into a data base for future reference by the authorities.

There's an OLD saying -- If you aren't part of the solution you are part of the problem.

PLEASE REPORT, REPORT, REPORT, REPORT.

And, DO NOT forget the Police Department where you are, as well as where the 'buyer' is!