Shipping charge for defective products.

[pimpom_in1]

I've seen some sellers impose terms and conditions which include a clause that, if a defective item is returned for refund, the initial shipping charge will be deducted from the refunded amount.

This is completely unfair and illogical. If the item is returned because the buyer no longer wants it, then deducting the shipping charge and a reasonable restocking fee is understandable. But returns due to a defect in the product is an entirely different matter.

eBay should impose a strict rule stipulating that sellers MUST NOT deduct shipping charges when they refund the price of a defective product. It would not be unfair if the seller even pays the return shipping charge.

[techniwas]

You have mentioned the product being defective (in that case no deductions)
and
The buyer no longer wants the product

There can be another possibility,

Many products at times are sent for warranty claim or replacement after problems arising in due course of use. (i.e. the product not being defective right when it was received).

In such cases if the warranty can only be claimed in sellers city or by seller then re-shipping charges has to be paid by the buyer.

[pimpom_in1]

My concern is about sellers who state that they will deduct shipping charges from refunds even if the product is defective on arrival.

Warranty returns due to defects after the product has been in use for some time are a different matter. Different manufacturers and resellers (not just at eBay) have different policies regarding warranty returns. Some of them even pay the return shipping charge.

[techniwas]

Yes you are right with the issue. In such cases filing a dispute will help to get the entire amount from the seller.