Returning item for repair, overseas

Sillychuckie

Hello.
I purchased an item (a watch) from a hong kong based online shop, and used a credit card when paying to be sure I was covered/protected if anything went wrong, or the goods didn't arrive (distant selling etc).
The transaction went through fine and I received the watch and have been happy with it.
After about 2-3 months though, it has stopped working. I contacted them and they said they will repair it if I return it.

Are there any steps I can take before returning it (I will obviously send it recorded delivery), to cover myself in case they claim they don't receive it? Has any cover through my use of a credit card now become irrelevant?
If they claim they don't receive it (even though I have evidence through the mail company that they did), how would one usually proceed?
I'll post it at the end of the week - hopefully I'll have heard any obvious tips by then.

Thanks.
SC.