JR_GraphicDesign, it would be fair to refund the money for a service you couldn't provide. What is with the 'future credit' when the client clearly states he doesn't want to work with you anymore?
It's like "give me $100 to bring you some water". After 5 minutes, "sorry, I don't have any water, but I'll keep the $100 maybe you'll need bread in the future". WTF?