Just FYI, he can go a different route of filing a claim for unauthorized used of his account. If his claim is approved then he will get refunded the whole $650, without being instructed to return the item.
Have the item sent back already and cut your losses to $45.
It is just not a good idea not to charge for shipping, because you never know when the buyer would want a refund or return.
I always indicate shipping cost plus handling fee and listing fees as non refundable to make them think twice.
What does the listing say about return costs?
If it's buyer pays, then ask for shipping costs.
If listing doesn't say, then ask anyway and advise "buyer" that you will be reporting a compromised/ hijacked account.
Make sure that you add the account to blocked bidders list. You might not get money back, but you might get the satisfaction of closing his account down.
was it shipped to HIS actual address? if yes, make him return it before refunding any money - unfortunately, you will be out your shipping fee - why would you charge no shipping when your cost was $45?
you can ask that he pay for one way of the shipping, but he may not agree to pay..........the "someone used my account" sounds like a false story so he could get out of the sale