Sounds like you went above and beyond. Wash your hands of it, and move on to people that actually conduct themselves appropriately.
I totally agree with SiteExpress, David. You've already offered far more than I would have. Let the lamer go and whine to the BBB - my guess is they'll laugh in his face.
Just forget them, I think they're trying to cause you trouble because their parents are also siblings.
Yes. I sell some software through third party shareware seller (I don't have Paypal). Demo version of software is available so refunds are rare. Just some professional refunders and that is all. Customers pay by credit cards. If I do not give refund when they ask they will dispute credit card charges and do charge back by their credit card company and will probably win. If I do a refund i will lose one dollar, chargeback will cost me few more. For too many charge backs I can loose my account and probably all the money in it. This is rare situation (2 in 100 ask for refund) but it happend.
I owned a retail store for 10 years. I had no refunds..but every now and then you had a jerk like this who demanded one or else...I usually chose the or else. F'em...this is where the cliche was born "You can't please all the people all the time"...let him steam.
The lady who wanted the refund pretty much emailed me every day I told me to return the money I am "holding for no reason". She even said she had lost sleep over it. I could have chosen to become angry and vengeful just like her, but at this time in my life, I see no need to absorb the emotions of such people. I sent her the money and said "Peace be With You!"
You kept her name and email so she can not buy again. Yeah, sometimes that is the best way, just refund and say something nice. Never be rude, though at times, with the emails some people send, it is hard not to be rude back. You did the right thing and you can be proud you did. As it says, what goes around comes around. You will be rewarded one day.