Threats from bad buyer: what should I do

[newstart2]

So I had this scamming Russian say the item I sent him is not as described, etc. when in fact it is. I have sold over a hundred of these items , never a issue, all positive feedback.

I offered him a refund of $25 to be done with him, he refused, I told him just send it back, he also refused that, saying it costs too much and he shouldnt have to pay. he told me in one of the ebay messages a few days ago that i should refund him 97 and if I dont I will face much bigger issues.


I asked him what he was trying to get at, he said, you will lose all your customers trust and all future business and I will report you for fraud. now that fraud part really annoyed cause he is the only fraudlent one.
i told him I am not making deals. he left me a really nasty negative, dropped my feedback down to 98.6, my sales have been cut in half the past few days and I am sure thats why.

Now my son was mentioning to me to report him for feedback extortion but he never exactly mentioned feedback in the messages, he was real careful, just said in in other wording.

Not sure what to do at this point? Should I do a 97 refund in exchange fro fb revison? and my profit was only $30 on this sale so I will lose $67 or should I let the feedback sit there as it is, it is the only neg I have had in the past 6 months...any advise?