Buyer started dispute on partially paid item - how?

[jelly2000]

A buyer partially paid an invoice, then opened a dispute saying they never received the item. But of course they didn't - they hadn't finished paying for it! How was it even possible to open a dispute on an unpaid invoice? What do I do now? My options are refund or share a tracking number, but neither makes sense here.

[kernowlass]

@jelly2000 

Well if they are not going to pay for it and you are not going to send it then why not just refund what they have paid so far?

[jelly2000]

It was a commissioned art piece. The deposit was for materials. As it stands I’m out for hours of labor but if I refund then I’ve actually lost money.