Hi,
The rule on eBay is that you bid, you win you pay! They have to confirm their bid a couple of times so there's really no excuse!
Open an Unpaid Item Dispute 4 days after listing end and close 4 days later. You will then receive the final value fee credit, the buyer receives a strike and they are blocked from leaving feedback.
If you do a mutual cancellation, the buyer may not agree so you won't receive the credit. They won't receive a strike - and can still leave feedback. If you let them off the hook they'll probably do the same with other sellers.
Add them to your blocked bidder list:
http://offer.ebay.co.uk/ws/eBayISAPI.dll?bidderblocklogin
Set your Buyer Requirements to block bidders with 2 or more strikes:
http://offer.ebay.co.uk/ws/eBayISAPI.dll?BuyerBlockPreferences&guest=1&guest=1
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