Being a quilter who does a lot of commission quilts I have to agree with many of these posts, you need to refund his deposit. And accept it was a lesson learned.
I have a couple times in the past 20 years taken a loss on a quilt. When you quote a price you need to honor that.
I have contracts and everything is discussed, put in writing and signed . 50% deposit is paid before I purchase a single thing or cut a single fabric. To start the conversation I Always quote fairly high ( someone asks- would you make me a queen size quilt?) I start my answer with Queen size quilts start at $500 and go from there, what did you have in mind? If they are still interested we then discuss theme, colors, pattern, details. If it’s different from anything I’ve already done I let them know I will check patterns, fabric requirements etc and get back to them, if it’s like one I’ve already done then I pretty much know the details.
i do whatever research is necessary ( I don’t order anything or purchase anything yet) and then write up the contract with expenses estimated time, quilting cost everything in writing and then sit down with the potential customer. If they agree we both sign the contract, they pay their deposit and I get busy. If something unexpected happens that costs me more, oh well- that’s on me. I always honor my quote. ( king size quilt prices range from $750-$1500! )
a couple years ago I made a special quilt for someone and a couple things happened that made it cost a little more than the quote just in materials and quilting- no labor time, when the quilt was finished I wrote up the invoice detailing all charges and time, then put ( price of quilt .... deposit received..... amount due.....
and delivered the quilt. The purchaser was so excited about the quilt Loved It. She paid what she still owed which was all I expected. About a week later I received a very nice card in the mail with a note and a check for $300 saying— you didn’t make any money on this quilt! I’m paying you more, we are thrilled with it and you deserve more.
its always best to estimate high, then they will be happy if it winds up less, and if they aren’t interested it’s their loss.