When do you tell a customer "sorry, but take your business elsewhere"?

I emailed the customer and told him to either a)provide the address in his credit card for further verification,

We usually handle security issues by phone, not email. A short chat will give you some idea about his identity and whether he is an appropriate buyer for the books. (or whether he'll just dump them on ebay, for example). You should certainly insist on knowing the credit card billing address. It's suspicious that he wouldn't readily provide it.

Tell him 'your boss' has more questions that must be answered. That gets the matter off your back.

We Google the name, phone, address (ship and bill) and email of questionable buyers and sometimes use reverse directories. We used Zillow to look up home values.

We politely reject a few orders a year if we feel uncomfortable with the sale.

To my experience, if people reply to your mail at all, chances are relatively high they will pay. In addition to that, I'd second that a telephone call sometimes works wonders, because you are somewhat lifting the curtain of annonymity.

I think any new customer placing a bulk-order for more than - lets say - five times your average figures is supposed to understand, that you don't feel comfortable, and should make his own proposals on how to build trust on both sides.

You may deliver one third in a first step, and after your customer has paid this first bill, send him the rest with no additional shipping fees.

Tell him 'your boss' has more questions that must be answered. That gets the matter off your back.

Exactly, adopt the persona of an employee who is being forced by company policy to insist that the goods can only be shipped to the credit card billing address in this case. There isn't any point getting into an argument - if you're unhappy with the transaction you need to refuse it, and do so without wasting your time on it.

Even with paypal there's a risk of chargebacks, and the investigations that paypal is supposed to carry out in such circumstances aren't always as thorough as they ought to be.

We used Zillow to look up home values.

Jsinger for what

If he refuses to do this, move on.

..Even with paypal there's a risk of chargebacks, and the investigations that paypal is supposed to carry out in such circumstances aren't always as thorough as they ought to be...

No, but just the act having to sign up with them will stop 95% of the scammers.