Cancel and refund (if he has paid), as there is no penalty for cancelling a transaction at the buyer's request on ebay. What could be worse is if the buyer pays, you send the item and then he requests a return due to the item being not as described(for a made up reason on his end). Then you pay for 2 shipments and give a full refund....consider yourself lucky he wants to cancel it now at no added cost to you.
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