I do, windy - I ask the buyer to email a photo of the broken item, and if it's broken, I give them a refund, no questions asked. if the transaction resolves after that, I'll give her reasonable feedback - it's not her fault that the item arrived damaged.
However, don't forget to claim from the PO in that case - you'll only get the cost of the item, you have to send a copy of the eBay description and final price, and the proof of posting slip, but the PO do refund you if it got broken in the post. (Last time I sent them a copy of the photo of the broken item, too).
Don't just think that it's only £2.50, it's the principle of the thing - sets a precedent for any next time.