He never changed the 8pin plug. I think he swapped the cable over, but cables aren't always 100% changable like that. Did you send him cables? Modular units also have the possibility that they don't get plugged in correctly. Use the cable that came with the PSU, make double sure it's in the right spot.
Units can break in transit as well. It's possible that even if you packaged it really well its got "jarred" and is now busted. If he double checks everything have him send it back and give him his money back. If it tests out when you get it back, try selling again. If it is broke, claim the insurance.
Edit:
If the item was damaged during shipping, do i still have to give a full refund, because that just does not seem fair lol.
So it's fair he pays "full price" and doesn't get a working PSU? Your name online means everything. Refund everything, even the shipping back to you.
Im no expect in commercial law where ever you are situated, but unless you provided some guarantee for the buyer, id say though luck for the buyer, provide him with your reciept for the psu and let him try to RMA it
See above. Your name online means everything if you want to do this in the future. No one will want to do business with a hard nose jerk who just says "tough luck". You don't have to warranty it for 30 days or 6mo, but assuming we are talking about a few days after the guy got it, you should stay behind what you sell for that long.