You would only have to offer a refund if it was proven to have been used already by another console.
You'll always get a couple of people who will try to scam you...so use scare tactics, such as:
"Sorry to hear that you have a code that has already been used. I have forwarded a copy of the code to Microsofts team at blabla.com who will verify the code has been used, and to what console, as I have explained the situation." you could then add a teeny lie if you feel cheeky like "if it proven that you are currently using the code then it will result in the code not only being voided, but your XBOX Live account will be terminated indefinitely."
I hate scammers and so do as much as I can do give as much as I get when it comes to them
