[stomachmonkey]

Really tough.

As others have stated the purpose of the deposit is so you don't sell it.

You have turned away other potential sales so really you should be entitled to keep the money.

Returning it is usually contingent on the buyer not being able to purchase it, their financing did not come through would be a reason, vehicle is not as described, stuff like that.

Don't like the color, that is weak.

That said, I'd be inclined to return the deposit.

Don't need the bad karma.

I never take deposits for this reason.

I tell the potential buyer they are first in line, I'll give them x days / hours to complete the deal.

Anyone else that comes along "takes a number" and gets the same offer, no deposit but complete the deal in the agreed time or I move along.

I get contact info from the others and tell them I'll be in touch if the person before them flakes.

Look on the bright side, you could have delivered the car then been told they changed their minds.

That would have sucked more.