The clause was about paying with a credit card which he absolutely knew I paid with paypal bank transfer since that is how he did the partial refund. To be honest I was not even expecting that since he kept telling me through 1 1/2 month of emails that the refund was coming everyday. I think if I was not so persistent I would not have seen anything.
Again there was no cost to him I believe he simply wanted to keep my money and find a way to justify it to himself. It am just thankful that I can pay my bill through a honest days work.