So UNBELIEVABLY MAD!!!What would you do?

I just went through this same thing with a small item shipped in the US. The buyer let it sit at the Post Office for 3 weeks (it required a signature), and then it was sent back to me. The only difference is, the buyer never once requested a refund, filed a claim, or even responded to my emails, including one where I told her I have both her item and her money and that she needs to let me know if she wants a refund or a reshipment. In the end, I sent it again with just delivery comfirmation, and it shows delivered today. I really went out of my way to help a buyer who would not in any way help herself.

In your case, IF you receive the bag back, you should probably just refund minus all fees and shipping charges. You know she doesn't want the bag and reshipping it would lead to another round of her not signing for it.
 
I have no intention of keeping both the bag and the money. I will give her a refund less ebay fees, a 10% restocking fee and any additional shipping fees that I will incur from the return shipping. The way I calculate it her refund will be $400-35(ebay fees)-$40(10%)-$50(this is what is cost to ship originally. So her refund will be onlTy $275. I hope loosing $275 will teach her a lesson but I really do not care. All I will be getting out of this will be less than$40. I can tell you that this caused so much aggrivation and stress that $40 is nothing. Maybe it will reimburse me for my hours of calling ebay and paypal. I am mad but not dishonest. This is according to my return policy in my listing.
 
People that do these things, unfortunately never learn a lesson.

They continually do it,because they can get away with it most of the time.

For what you have been through, any fees that you have incurred and will

deduct from this buyer is appropriate. Yes, you may be mad and deservedly

so, but you also know the right thing to do which is to give a refund because you are

an honest seller. Too bad if the buyer doesn't like it!!