You really have to decide for yourself. If the buyer is unfairly asking for a refund then I suggest you ask customer support to look at it. It may be that support will see that they do the same thing to other sellers and hopefully they would take action against that fake buyer.
Cancellations have a small effect on your account unless you have a lot of them. Try to keep to over 90% Orders completed but don't panic if it goes below that. I don't believe it makes a huge difference anyway.
If you get a bad review it COULD be more of a problem because you only have a few reviews.
I would also say that the services you offer seem to get more cancellations and bad buyers than other services. I don't know if this is because there are more bad sellers or if Traffic and links attract a certain type of person. Often, people who buy traffic or links have unrealistic expectations like they spend $5 on traffic and earn $50 in Adwords or buy $5 of links and expect to be top of page 1 in Google the next day. As you know, it doesn't work like that but a lot of buyers have no idea what they are buying.