"The seller and I are in communication but they aren't being very friendly about this. They're mad at me already because I gave them a "neutral" rating both because I got an item that wasn't what I ordered and because they were cheap and put it in an envelope to ship it instead of a box and the envelope arrived with 5 rips and a hole in it, one rip was so large that it's how I took the jacket out. They also took 7 days to ship it. I thought a neutral rating was generous, considering."
Sounds like a flaky vendor to me. Seven days to ship is inexcusable. A neutral rating is tame for selling the wrong item PLUS late shipping.
The envelope/box thing is a tougher call. The top retailers (REI, Eddie Bauer, etc etc) all use poly bags, but they can absorb the risk--- and have the leverage to get back at the shipping company. I got a down sweater from Eddie Bauer in a poly bag with holes in it, but the garment survived. Dumb luck on their part!
The tough part is how much weight is saved. A box will often take things over the 2 pound limit. eBay vendors can get slammed if they overcharge for shipping and the competition of the marketplace favors lower shipping prices, ergo the use of light bags. Some mail processing centers are really rough on packages. Ultimately, common sense needs to prevail and the item needs to be protected.
I once sold an item that was trashed in the mail. I gave the buyer a complete refund after seeing a photo. She told of also getting a package of stickers that was ripped open and empty, and when she went to the post office to complain, a worker rolled by with a cart FESTOONED WITH HER MISSING STICKERS! I guess she got a little hot and they threw her out.
All you need to do is open a claim with eBay. If the vendor has been abusive, threatening, or refusing to respond due to the feedback, forward that info to eBay. Once your item shows as delivered to the vendor, eBay/PayPal will automatically refund the payment, including the shipping you paid.
I've only had to do this dance a couple times in 14 years on eBay. I got a Mountain Hardwear fleece that was so totally counterfeit I could see it without opening the clear plastic bag. Smelled like burnt oil too.