Customer claiming item came damaged - I’ve done my due diligence in packing. What now ?

Customer is demanding a refund for a handmade and painted figurine which took countless hours , was sent pics and tracking of , and they said they loved the photos.

Arrived , they showed photos of breakage and now said they want a full refund. I’ve done my due diligence in packing. What are my options as a seller? Will PayPal help me or do I have no options as a seller ?