Paypal refund question

I searched and read a bunch of threads and couldn't find one that answered my question. Sorry of this has already been asked. Anyway, today someone paid me for a gecko then about an hour later messaged me asking me to cancel the transaction because his bank account has a zero balance. I assume I just click the refund link. My question is, is it possible for me to get screwed by doing this? I don't want to refund it then find out my balance is negative because I did. Thank in advance for the advise!

No matter what you do, it appears he is still going to have insufficient funds:

3.5 Bank Transfers. When you use your bank account as your Payment Method for any transaction or to initiate an Add Funds transaction, you are requesting an electronic transfer from your bank account. For these transactions, PayPal will make electronic transfers via ACH from your bank account in the amount you specify. You agree that such requests constitute your authorization to PayPal to make the transfers. Once you have provided your authorization for the transfer, you will not be able to cancel the electronic transfer.

I was under the impression that one needed to have a backup method to send instant payments, and if one did not have that, the payments were sent as checks. So he must have a backup?

I did find the following info:

4.4 Risk of Reversals, Chargebacks and Claims. When you receive a payment, you are liable to PayPal for the full amount of the payment sent to you plus any Fees if the payment is later invalidated for any reason. This means that, in addition to any other liability, you will be responsible for the amount of the payment sent by the sender, plus the applicable Fees listed in Section 8 (Fees) of this Agreement if you lose a Claim or a Chargeback or if there is a Reversal of the payment. You agree to allow PayPal to recover any amounts due to PayPal by debiting your Balance. If there are insufficient funds in your Balance to cover your liability, you agree to reimburse PayPal through other means. If a sender of a payment files a Chargeback, the credit card issuer, not PayPal, will determine who wins the Chargeback.
"Reversal" means PayPal reverses a payment you received because (a) it is invalidated by the sender's bank, (b) it was sent to you in error by PayPal, its parent, or Affiliates, (c) the sender of the payment did not have authorization to send the payment (for example: the sender used a credit card that did not belong to the sender), (d) you received the payment for activities that violated this Agreement, the PayPal Acceptable Use Policy, or any other PayPal agreement, or (e) PayPal or eBay decided a Claim against you.

terrible, who orders a lizard when they are broke lol

Is there a reason you didn't get the answer to your question directly from PPal??