That's what Shenzhen told me too.There's no refund. It's just a matter of returning for a "fix" now or later.
Have you tried a strong email to them? That's what I did (after months of polite exchanges). I didn't use harsh language, but I spelled out my dissatisfaction, and pointed out that they had to accept that this sale was a loss to them, and they needed to just refund me the money... It was a pretty strongly worded email. They refunded me 80%, then I yelled at them again, and they refunded me the remining 20%. I felt like yelling a third time to get my shipping fees back, but decided to not push my luck and just chill.
I don't know if this is helpful, but it seems like you have as much pain over this as any. And they sold defective merchandise, that they know is defective and don't seem to know how to fix! It's just so incoherent.