I would tell them that 1/2 was not refundable. That 1/2 was kept because you didn't cancel.
BTW... I never sign such a thing. You could have rented to someone else..but..they cancelled 2 days before move in..and you give money (any money) back? huh?
My document states clearly it is a RESERVATION DEPOSIT and it NOT REFUNDABLE. The RESERVATION DEPOSIT will be automatically rolled into the SECURITY DEPOSIT after the tenant moves in.
Anyway... I would not pay them the 1/2. the worst that can happen is they take you to court, a judge orders your to pay it (which I very much doubt would happen), and you pay plus their filing fee...not much of a risk.