One thing I've learned from Judge Judy is that you should document all of this and keep any evidence you might be able to use in your defense. For instance, you

One thing I've learned from Judge Judy is that you should document all of this and keep any evidence you might be able to use in your defense. For instance, you should have some proof that you refunded the money, if at all possible. It makes you look much better if you have documents and the other guy doesn't. And anything is often better than nothing.