I sell a lot of my old anime and games on ebay. Don't refund until you get the item back, verify that it's the exact same item and in the same condition that you shipped to him. If it's not, dispute it. I see you have good pics of the cart. Watch that carefully.
I had a seller demand a refund for a Japanese PS1 game where the case cracked in transit (was well packed, but those things are brittle as hell). Guy wouldn't take anything but a refund, but I made sure he did his due diligence in getting me pics of the item and other than the case, it was sent back in the exact condition it was shipped to him in. Just get the item back, get the refund out if the item is still in sellable condition, and cut him loose as fast as possible. These types of encounters are rare for what it's worth.
For re-listing, make sure to mention the sticking point for this guy and maybe take an additional pic of it, that way they can't say different than description anymore.