Hi everyone,
We have an automated dispute process so that buyers and sellers can easily resolve cases regardless of payment method. However, we definitely know that sometimes these disputes are not easily resolved. If you need help with a case or dispute or just have some questions, definitely email our Trust & Safety Team at trust@etsy.com.
They are able to look into your scenario and can give advice or instructions on what to do. If it's necessary for them to intervene in a case, they will only do so after investigating the claim and will explain the reasoning for the outcome.
The bottom line is that we want to make sure that cases are resolved as smoothly as possible, and if that means Admin intervention, we're happy to help. The goal is for both parties to be comfortable with the outcome.
I can't speak to the scenario above about someone getting their shop suspended because they didn't provide a refund--there is probably more to the story than that. However, it is possible for your shop to be suspended if a buyer files a case and you never attempt to resolve it.
You should all make sure that your Shop Policies have detailed return/refund information so we're able to refer to these if intervention is necessary.