When was their booking for? If it was for last night and they told you last night, no, they won't get a full refund. You look to be set at 'flexible', meaning they can get a refund if they cancel 24H before. Maybe move to 'moderate'.
Sorry to hear that, it's a pest when guests try and cancel at the last minute (especially when you have everything ready for their arrival).
It might be a good idea to review your cancellation policy - as this determines what your guests can do and get in terms of securing a refund. This might give you a few ideas: