@mtt_harrison,
If you accept their cancellation request, you lose all that and the payment.
On top of that, they may be able to leave a review, if you delivered the product.
Try to negotiate with them.
You have the right to decline the cancellation request, if the service was provided as promised.
There is an option to provide a partial refund as well.
In any case, try to discuss the project with your clients thoroughly before accepting an order (if possible).
Alternatively, there is a feature called 'Request to Order' that is available to Seller Plus members. This turns direct orders off and requires buyers to talk to the seller before placing an order.
I am one of the least experienced sellers when it comes to cancellations as I only have 1 in hundreds of orders but, I hope that this helps.
Spyros.