You are not supposed to refund before you have the item back in your possession.
Whenever a buyer is refunded before returning the item they claimed was defective, not as described or wrong, that item suddenly becomes perfect and the buyer usually keeps the item and the money.
You might want to file a claim with the internet crime center.
http://www.ic3.gov/complaint/default.aspx
If the buyer is in the US, you might be able to file a mail fraud claim through the postal inspector's website.Type of complaint would be Merchandise or Services and Failure to Provide.
http://ehome.uspis.gov/fcsexternal/default.aspx
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Non payers should get unpaid item strikes and be added to block bidders lists. Period.