Deposit - Do you keep it if sale falls through?

[merlin]

So I had two bikes (a 250 and a 600) and no car, now have bought a BA ute and am selling one of the bikes (the 250). Had it advertised on another forum for $3,000 and one guy (lets call him Fred) was really interested (though he didnt have a license). Anyway showed him the bike ect. and he said he was going to go do his 2 day RTA learner course and get back to me. Meanwhile a few other people were interested and posted up saying could they look at it. When Fred saw these replies he rang me in a panic and said don't sell it to them I will put down a 10 percent deposit. So I say OK and he does an internet bank transfer to my account.

Now I havn't heard from Fred in a week or so and I email him and he says he failed the L test (what the $%, it SOOOO easy, P's are the hard one), and he isnt going to get a bike.

Hmm in the meantime I have turned down 4-5 enquiries about the bike and knocked back 1 cash offer as Fred already had a deposit down. So should I give Fred back his $300 or do I get to keep it - advice I have had so far is that I keep it. What would you do?