I have a similar problem. It hasn't escalated yet, but I'd like to know my options. As of right now, I have them tagged to refuse future orders and I have internal notes on them. I plan to simply cancel and refund if they ever try to order again. I had to do this on Etsy once with a customer when for some reason I couldn't block them. That's my temporary solution but I hope that Squarespace comes up with something to help us.