I am a firm believer that the seller ensure that adequate packaging is used for the item to arrived in the described condition.
Should the seller have not used good enough packaging then the seller should refund or partial refund you should the damage be minimal ( obviously it isn't in this case). The seller can ask for the item to been returned before refund but again the seller should pay these costs.
Remember that most courier will not accept liability should poor packaging be used, each courier have their own criteria for what is considered adequate packaging. Here is
Royalmail, Go to DVD and CD section.
Should good packaging be used then the courier is at fault and you should request the seller to initiate a claim. The seller will do this and do the following:
1) Start Claim and refund you
2) start claim and wait for claim to be fulfilled before refund
This is of course providing the shipment had the required insurance value, if sent via standard Airmail then the maximum amount that can be claim is £46 GBP.
This is of course my own view