You mean you setup the Time Machine to backup your Macbook right?
Please go to the Apple logo at the upper left of your computer screen to About This Mac and give me this information:
Reboot into the Recovery HD by choosing the ‘Apple‘ menu > Restart, then hold down the ‘Command’ + R’ keys on the keyboard during the start up process. When you see the Apple Logo you can let go. When the machine boots you may have to choose your language then you will see the OS X Utilities screen. Select the Disk Utility and then select Continue. Then in Disk Utility select Macintosh HD in the left column (if there are two with that name or it is named something else choose the first indented item) and then on the right select the First Aid tab then select Run.
Try erasing the drive again but choose the Security or Option button and move it one notch to the right to secure erase.
OK did you have Filevault turned on?
I would do a hard reset of the TC and start over:
OK I assume you got a warranty with the refurbished TC? I suggest you return it