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Ben689908
Explain that it would cost more to get a suitable frame and have it built up with your components than to buy a replacement. Bill in full for a new like-for-like bike, and if you find a suitable bike for cheaper afterwards you can say so and refund him some cash, and he’ll be a happy camper.
My unsolicited life advice: always, always charge people in full, and if you’re giving a discount make it explicit. It’s much harder to get additional payment after charging too little and realising the problem is larger than expected. No customer has ever been angry to have a partial refund, but having to pay twice pisses everyone off.