[Cozumeleno]

I think you can give a refund, but you might have to request that the buyer let you out of the transaction. If they say no, I'm not sure what happens from there. You can always refund via PP, but the buyer may will have the option to leave feedback (which could be negative) unless he agrees to cancel the transaction.

Also agree with the previous poster about leaving false positive feedback. eBay doesn't look kindly on that. Plus, now that the buyer has paid he might be able to retaliate. I've been tempted to do that before, but there's just not much benefit in it. Assuming he has a lot of feedback, chances are slim that anyone will scroll down to see that comment. It also just opens up the door for retaliation.