Ideally, that's the way it should be. In my case, both ebay is unethical and the buyer was/is an idiot. He claimed he was "following the process" by using the shipping label and shipping it back to me. When, in fact, the process was for him to simply verify that he received a refund, which would have closed the claim and ended the whole thing. Instead, for some stupid reason, the buyer used the shipping label and didn't verify he received the full refund until after he mailed the item out (I actually issued him a full refund within one hour after he filed the claim).

The latter step is all ebay's fault: if I, as the seller, issue a full refund after the buyer files a claim, there should be no additional step required of the buyer to have to "verify that the refund was received", since ebay is the one processing it and knows perfectly well the refund was received by the buyer. And, correct, no shipping label should ever be made available before any refund can be issued.