It won't make you feel more comfortable for me to 
say this, but you should give him the feedback he 
deserves. He backed out of the transaction -- and 
for no reason. That merits negative feedback. It 
is too bad he was a victim of fraud (assuming the 
story isn't a lie), however that has no bearing 
on your transaction with him. You are NOT 
obligated to deal with an Escrow service (I know 
I've never wanted to goof with those) or do 
anything that is not outlined as an option in 
your auction terms. If he was not comfortable 
with your terms, then he should have contacted 
you BEFORE he bid to ask about alternative terms, 
or he should NOT have bid. End of line.

I also have 100% positive Ebay feedback that is 
simply waiting for some jerk to screw it up, but 
I still do not hesitate to leave a negative where 
it's due. I think part of the reason I haven't 
had any retalitory negatives given to me is 
because I am extremely clear what my terms are in 
my auction descriptions and I do NOT let myself 
look uncertain in front of high bidders. The few 
times a high bidder has started acting weird with 
me, I have sent a polite but clearly stated mail 
explaining that their bid is a legal contract for 
them to complete the transaction, that I do leave 
negative feedback for non-paying bidders, and 
that they will be reported to Ebay authorities.

So, before you give him the negative, make sure 
to report him as a non-paying bidder to Ebay. 
Save all your mails from him and the ones you 
sent to him. Whatever he sent to you (10 cents? 
what the hell is with that?), make sure you have 
refunded it to him and have kept proof that you 
sent the refund. Then when you DO leave the 
negative, make sure that it is clear and concise 
and ADULT LOOKING. Don't leave emotional comments 
full of insults, only state the facts. Something 
like: "Non-paying bidder. Insisted on terms not 
in the auction description." (That will fit in 
the 80 character allowance.) If he leaves you a 
negative, all you have to do is again be adult 
about it. You can leave a response to the 
negative stating similar: "Retalitory feedback 
from non-paying bidder. Bidders must adhere to 
auction terms." (This also fits in 80 characters 
if you either leave off the final "." or don't 
put a space after the first ".")

Anyone with a brain who sees responses like that 
to one negative feedback on a whole page of 
positives will inevitably realize you got stuck 
with a jerk. Everyone knows about retalitory 
negative feedback and that Ebay insists on doing 
nothing about it. I actually think MORE of 
Ebayers who I see have had the balls to leave a 
negative where a negative is due, since I know 
that the negative they left for the jerk might 
have kept ME from having to deal with said jerk.

Many Sharp Smiles,
--Drac