Quoted from seeburg220:I will refund him in person, when he comes to get it, and I will sleep well tonight.
Remember that allowing someone to pick up an item is very risky unless they pay cash. Since you will have no acceptable proof that you delivered the item, someone who pays for an eBay item with PayPal can claim they never received the item and eBay will force you to refund the money (in this case $500). Only accept CASH when someone picks up an item in person.