You are right.
Politely thank him and tell him that you will close the complaint promptly when you see your refund in your Paypal account.
Give him until Monday evening -- because, weekend. But if he is online, it takes seconds to refund through PP.
If you don't have the refund by Monday evening, escalate to a Claim.
If he cannot prove that the item has been delivered, and does not refund, PP will, and then go after him for their money. Hard.
You've returned to me the only thing I truly treasure.--- Durran Hayter