What would you do?

I sold a Meridian 508.24 to a member, and upon his first week of ownership, I called to see how he was making out with his new CDP. He told me that the unit skipped and because he did a lot of recording that he could not use it. He stated that he wouldn't feel right about selling something that he knew had a problem.
After hearing him out I agreed to take it back and see for myself what the problem was.I told him that he need to isolate the unit and he came back with, "I own B&W's 800 and I know what I am doing."
Upon getting the unit I played three hours on it with no problems. I knew it wouldn't skip but felt I needed to go the extra mile with him.
I called him and told him there was no skipping when played for three hours. He stated that he couldn't use it. I sent his money back and E-Mailed him and told him I wanted to leave him a negitive feedback. I have yet to leave him feedback.
I sold the unit and lost money on the sale.
There are many members out there that have alot of wisdom on deals like this. What would you do?

Thanks,
Gary