Block this person from bidding on your auctions. I sold Luncheon Vouchers worth £12.00 the buyer paid using Paypal. I posted the item out promptly, later that day the payment was reversed as the card used to pay for the item was an "unauthorised payment". If this person would scam for such a small amount, I guess they would not hesitate to do it for a much larger amount.
So do as I have done, BLOCK THIS BIDDER.