Partial Refund for dishonest buyer! Is this encouraging dishonest buyers to exchange old products (not sold from us) and get new ones (from us) ?

Order #701-9328759-7913818The buyer claimed that they received a damaged item and requested a return and refund. The order consists of three pieces that make up a set (left, right, and middle pieces) which cannot be sold separately. The buyer reported damage to the left piece and requested a return. Despite multiple requests, the buyer failed to provide photos of the damage. We informed them that we needed a photo to send a replacement, but the buyer refused the replacement and insisted on a full refund.

When the buyer attempted to return the item, he discovered that Amazon’s third-party service does not cover the shipping fee. Consequently, the buyer sent a photo showing the damaged side (from a specific angel side to take the photo, not entire piece) and also claimed the item was brand new. The buyer's purpose was to get a paid shipping label from us. All the messages back and forth were about getting a free shipping label.

And, yes. We covered the returning shipping label in the end. ( If not, it's non stop messages)

Upon receiving the returned item, we found that the damaged piece was NOT our product. Sadly, the damaged piece is not our product and is a scratched, dusty, old item. This set cannot be sold separately in the market, indicating that the buyer likely damaged his own and old item and attempted to get a replacement by claiming ours was defective. His plan seemed to be "buying the new one, sending back the old one, claiming damage, and getting a full refund."

We denied the buyer’s request, but the buyer continued to send aggressive messages and even filed an A-to-Z Claim for a refund. After discussing with Amazon support, they suggested a partial refund because the buyer returned partial of our products. However, since the set cannot be sold separately, this effectively means the buyer received a replacement at a very low cost and achieved his goal.

Dishonest buyer returned their old and damaged item! Amazon support team suggests a partial refund. I understand that Amazon support wants to avoid losing the A-to-Z Claim case, but offering a partial refund to a dishonest buyer encourages this behavior, allowing them to exchange old products for new ones at a lower cost.

But Partial Refund for dishonest buyer??? Is this encouraging dishonest buyers to exchange old products and get new ones at a lower cost or zero dollar of buying ?