The software has a 30 day free trial (no cc) and also a 30 day money back guarantee after purchase.
He used the trial version then upgraded the software. Sent me one email about something not working which I replied to. Never asked for refund.
Then almost after 1 year he files a dispute in Paypal (which Paypal decided in my favor btw) but now he is harrasing me almost every other day about leaving negative reviews if I don't refund him.
He has already left a few negative reviews about my software but I'm okay with since it's just angry abusive non-sense that has nothing to do with my software.
But he keeps on threatning me with emails. Now he is threatning filing police complaint against me and my company.
Part of me wants to refund him and get it over with (just 200 bucks) - though I can't be sure if this would stop his non-sense.
But another part of me is angry and feels that this is not right and I should just fight it out.
Please give me some advice if you have experience with this.
All kidding aside, if you can bear the harassment ignore him. $200 is small claims court turf. If he does that, counter file for damages, filing costs, and time loss and other costs, and show the email trail in your submission.
Since you are in India, he has no hope of an international small claims court hearing and he, in fact, has no case.
This is not necessarily an irrelevant detail. What does your software do, and what was your customer unhappy about?
You may have ignored the one thing that made your software worthwhile to your customer - do you have usage data to put the above into context?
Short answer opinion is - Just refund him the money and be done with it, your life will be easier. Not saying that the customer is right (they certainly aren't imo) but for 200 bucks to have that a-hole out of your life? A bargain compared to the stress and hassle it has already caused you.
Some people have nothing going on in their lives (or live in the alternate world of keyboard warriors) and will just keep on and on since it gives them a target to take their misdirected rage and frustration out on.
TLDR; Refund the A-Hole and be done with him.
Sure, it is not right that they are doing this (and 200 bucks is a lot) and also bullies and idiots need to be stood up to but on the other hand think of what it has cost you so far in terms of stress, PayPal disputes etc.