Online private seller kept both the returned item and my money. What to do?

I started using Vinted since last 3 months: bought and sold items, all good, have only positive reviews.
Recently I bought a knife sharpener for about €35. It was described as basically unused (“tested once”). When it arrived, one of the sharpening stones was broken and the item had clear signs of use. The damaged side wasn’t visible in any of the listing photos.
I opened a dispute and returned the item through Vinted.
During the return, the seller told me in writing:
“You’ll get your money when I pick up the package.”
She then picked up the returned package, but afterwards disputed the refund. Vinted sided with her and released the payment to her. When I tried to connect with the customer care 5-6 times, they repeatedly say some none-sense like the issue happened during return. I’m saying to them that I started the dispute when I received the item broken and I provided all the photos. Regardless, they don’t accept any of my comments.
So the current situation is the seller has the item back and money.

I have screenshots of the original listing, the damage, tracking/collection and her written promise to refund me after collecting it.
Vinted support refuses to help further.

I opened a dispute with my bank as well to help me.

The amount itself is obviously small, and I don’t want to waste hours chasing €35. What bothers me is that someone can apparently receive their item back, keep the buyer’s payment as well, and Vinted considers the matter closed. My main question is: the price would be obviously much bigger than this. How do people deal with such situations? Would you file an online police report (Anzeige wegen Verdachts auf Betrug)? Is there any better way to deal with it?