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Do not close dispute, escalate the dispute to claim to ask PayPal to step in. You will need to return item for a refund though if PayPal rules in your favor.
PayPal has a return shipping refund program for future purchases if this return is not eligible:
The way these kinds of sellers do business is untenable. They don't have the real merchandise they actually sold but peddle these widgets and try to get more for them. Sigh.
I would also make a separate report to aup/compliance dept:
Thank you for your reply. If the messaging shows that PayPal is reviewing the situation, it sounds like the dispute was already escalated to a claim. PayPal steps in to review the matter only after it's escalated out of the buyer/seller conversation stage and enters the claim stage.
I hope this helps!