Paypal's unfair dispute resolution process

[Oralgully]

I've emailed Paypal 14 times regarding this matter, and the 8 times they've actually responded, it's been in the form of an automated response that doesn't remotely address my concerns. Now, I find out they've turned the matter over to a collection agency.
In early May, I sold an autographed baseball bat for $750. Around two weeks later, the buyer decided he no longer wanted the bat and requested a refund. I was in the process of moving, so I told him to wait two weeks before sending the bat back and then I'd grant a refund. Well, two weeks later, when I finally have internet access again, I discover that the buyer filed a claim against me claiming the bat was "not as described" and since I did not respond in the 10 days required, it was decided in his favor. Luckily I had already withdrawn the funds from my paypal account, meaning I now have a negative balance. The buyer actually did return the bat a few days later, but he did not return the letter of authenticity that accompanied it (which significantly decreased the value). I contested Paypal's decision and explained that the item was not returned to me "in its original condition" as their policy states, but they refused to reverse their decision or even acknowledge my concerns. I requested that the buyer return the letter several times and eventually mailed the bat back to him, meaning he now has the bat and his money. Paypal will not do anything to correct this situation, and now I'm afraid my credit rating is going to be ruined because they've turned me in to a collection agency. I will never use paypal again, and I will not pay them a dime. I refuse to pay for their hasty and unfair decision.