You live and learn I suppose. I aways ask the customer if they want to keep the 'rubbish' myself but I think the customer in question has gone way over the top here. Whether or not she's in the right to with-hold payment because of what's happened I'm not sure but maybe it would be best to put this down to experience and not upset the woman any further, sounds like she could absolutely ruin his reputation if he does.
Maybe she hasn't gone over the top, she had one weapon to use to have her property returned, it doesn't matter what value as far as she is concerned the bag was hers.
Also to use that one weapon she had very limited time, she could not let that cheque clear, probably a smart woman who knows reporting what she sees as a theft may not be taken seriously by the police.
Sometimes we have to think like the customer not so hard to do because we are all consumers ourselves.