You really shouldn't be posting the buyer's ID an email address here, as aside from being against board policy, there are issues of privacy laws... 

As the buyer asked to cancel, I'd probably seek some advice from someone who is a bit more informed about your legal rights in this case. The buyer doesn't have a right to keep the goods, but you may be responsible for any return costs. (eg call ACCC, or your local office of Fair Trading). 

Once you know exactly where you stand, send them a formal letter advising of their options, and that legal action will be taken if the product is not returned (or paid for) by X date. 

EDITED TO ADD:.... well, now my post makes no sense at all.  Leaving it here just in case it helps someone, but.