I've played a 360 but I've never redeemed anything.. but on the PS3 if you enter the wrong code or one that is used, it will say this code is invalid or has already been redeemed, I think something around those lines. I don't know how it is on xbox or if it says something completely different whether it is not valid or if it has already been redeemed. If that isn't the case, I would just check that you've sent the right code and that he entered it correctly.
Other then that.. hopefully you took a picture of the code before you scratched/peeled the cover off. If so, if he files a claim you will have some evidence to back you up and you should be fine and would probably win, unless you have 0 feedback.