Unverified paypal bought my ipod on ebay. what to do?

I sold this ipod nano on ebay for $120. I stated the following in my listing.

We will ship to your BILLING ADDRESS (credit card) or your CONFIRMED/VERIFIED ADDRESS (paypal payment) ONLY. NO EXCEPTIONS

Now I find out that this guy is not verified, has an unconfirmed address, and the seller protection policy is ineligeable. I clearly stated that I will only ship to confirmed. What should I do now? I am thinking of just refunding his payment and saying " Sorry I clearly stated in my listing that your paypal account and address must be verified, yours is not "

I don't know what else to do. Do I just relist it and this is over? Am I going to get negative feedback? And help or advice would be great. Thanks.

Refund and Relist. That's what I would do. If the asshole leaves you (-) feedback, make a note in the feedback received that the buyer was unconfirmed, your listing specifically said verified paypal only and you had no choice but to relist.

It was his fault.

Refund him and tell him why, then reilst and try to make it even clearer this time. You can also restrict those kinds of buyers from bidding/paying on your auctions.

Log into Paypal, click on My Account, Profile, Payment Receiving Preferances.

Refund and sell it to the second highest bidder if he can't provide a confirmed address.

Ok I refunded it and am relisting it. I have two 1gb black ipod nanos if anyone wants to make an offer on one!

Thanks for the advice.

Yeah but give him a chance to repay you with a confirmed address.

Well I do have an extra if he decides to repay with a confirmed address. But I am putting the other one up.