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I won a SNAD case and got my money back from eBay.  This seller has a habit of cheating USPS with insufficient postage.  He shipped the heavy item to me with a 1lb shipping label and luckily didn't get caught.  Now he wants the item back by giving me a 1lb return shipping label.  I told him repeatedly this is insufficient postage and the package will get returned to sender, i.e. me.  I'm getting tired of emailing back and forth arguing with the idiot on this under postage issue.  He seems to have a problem understanding this.  Should I screw him and keep the item?  Thanks.

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You have your money back, so that's a good thing. I would contact eBay and let them know about the issue and then contact the USPS postal inspection service for your location.

US Postal Inpection Service and let them handle it.

You could also let the seller know you might do this if he doesn't provide proper return postage (just be sure you know what the proper return postage is).

I don't think it is wise for you to keep the item in any case.

There are basically 3 possible outcomes here if you ship it, none of which would reflect particularly badly on you.
1) as you said, it can get returned to sender, in which case you have made a good faith effort and he got screwed by his own bad behavior, and you can document that it was his fault not yours and you keep the item and he doesn't get his label refunded. (poetic justice)
2) it can arrive at his house with "postage due" which is hilarious because he'll have to pay up before he can collect his package. (I'd stick a rock in there just for fun) This has happened to me a few times with eBay sellers (only when the post office has a gung-ho new hire or an inspection coming up though)
3) it can go through just like it did when he shipped it to you

In any case, if you ship it, none of these outcomes are going to jeopardize you, and you can prove that you made a good faith effort to comply with the terms of the refund, and the seller ends up holding the bag for anything that goes wrong. If you want to keep the item, you can force the first scenario. Take the package to the post office with his label on it, tell the window staff that you don't think the affixed postage is adequate, and get them to formally reject it on the spot. If you really want, you can also tell them that it arrived to you from the destination address with inadequate postage and suggest that the sender's address is a repeat offender. Then you keep the item, he pays for the label anyway, and he also gets flagged for fraud.

The box is oversized so I have to drop it off at a USPS counter in person.  I did it once and the postal employee would not accept it given the insufficient postage on the label.

Anyway, I contacted eBay Resolution for guidance.  I was advised the item is now mine to keep and to ignore any further message from the seller.  I'm under no obligation to send it back because the seller failed to provide the proper return shipping label with adequate postage.

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