Several thoughts here...
The listing was for Australia only (I checked). Unless there's something I don't know about, they shouldn't have been able to buy. The Russians and the Chinese are well known for getting round blocks by changing their primary address to one in Australia, buying the item, then quickly changing back to their normal overseas address and then requesting an invoice and insisting that you post it overseas to them. This would mean that the sold email would have an Australian address on it, but the invoice would be for an overseas address. Did the sold email have an overseas address or not?
This happened to me once and the email had an Aussie address but I know of two others it's happened to and I'm not sure theirs did. It's too long ago to ask them as I'm not in touch with them any more, but I know we were all selling rare items that were very popular with the Russians and Chinese at one stage. There may be other ways for them to get around your blocks, but if you've got the proper blocks in place then getting around them is considered "unwelcome and malicious buying" and it's a policy violation. If ebay issue them with a policy violation (yes, "if"), they automatically remove any associated feedback and defects (see further down).
See this page: http://pages.ebay.com.au/help/policies/buying-practices.html for this: Unwelcome and malicious buying: We consider bidding on or buying an item when you have no intention of completing the transaction, or circumventing a seller's buyer requirements, to be unwelcome and malicious buying. (I put the red colour to emphasise the relevant point.)
Then see this page: http://pages.ebay.com.au/help/sell/cancel-transaction-process.html It has nothing about the buyer being asked to confirm that they agree to a cancellation. It just says that ebay lets them know you've cancelled (past tense), and that if they've already paid with paypal they're automatically refunded, and once they're refunded the cancellation is complete.
Has anyone reading this had a cancellation as a buyer recently, and have they had the opportunity to refuse the cancellation? I think whoever said it's automatic now is right, but I could be wrong. I've heard a few others on the boards say lately that it's changed. You could wait until they pay and then cancel it as there being a problem with the buyer's address, which most likely won't earn you a defect. I've read in the forums where that's been done before, but it's hearsay.
The page quoted above also says cancelled transactions earn a defect, but that's only true in some cases - and in some cases you can get it removed. See this page for defect removal: http://pages.ebay.com.au/help/policies/defect-removal.html - specifically this bit :
We automatically remove defects, adjust your late shipment rate and remove Feedback when:
Starting with **** - you can argue that they've violated the policy by getting around your blocks (as explained further up my post).
If this doesn't work you could argue *** - that there must have a site issue for them to be able to buy from a listing that is set up for Australia only.
If you decide to open an unpaid case rather than cancel you've got ** to argue, which most people don't seem to have any problems with, but there's always a chance they'll pay.
A lot of this comes down to who you got at ebay if you did end up with a defect or bad feedback and had to try and get them to remove it, and whether or not they apply their own policies. I'd say there's a fair chance that the buyer will eventually give up and go away, but I'd give them plenty of time to get fed up with you first and I wouldn't open a non-payment case until well after the four days.
It's a pity you sent an invoice because with some overseas transactions they can't pay without an invoice. I once exempted a US buyer so she could buy but I didn't set the listing up right and she couldn't pay when I did send the invoice because my other blocks were still in place. A friend had the same happen and she figured it all out but I've forgotten it now. Anyway, you've sent the invoice now.
If they did pay and you posted it, it's often hard (if not impossible) to get tracking to show once the item leaves Australia (even though you pay for tracking) and you'd be at high risk of losing a not received case, or worse still, they could open a not as described case and ebay would just refund them the lot if you didn't pay for them to return it. There's a lot of risk of you being out of pocket if you send it and they may pay simply because they know there's a good chance they can get all their money back later on, and get to keep the item. Even if they pay and don't try and get their money back if you send it, you could still get negative feedback.
I personally would cancel because I feel the risks all round are lower, but it's your call, not mine. If you cancel and the buyer is able to refuse it, if you don't get your fees back it's only 99c, which is less than what you'll pay in extra postage and paypal fees if you do send it overseas.
