A customer filed a dispute about three gift card he was asked to purchase from whom he thought was his bank. He did not give up his card information and no one used his card on his behalf. as unfortunate as this incident is, I believe we do not have to refund his money. Am I correct with this train of thought?

How were they purchased? You mean he used his card to purchase them himself?

Exactly. Afterward, he realized it was a mistake.

Buyer's remorse is not a Reg E issue.

he is holding the cards he purchased, tell him to return to the point of sale or just use them. he did not lose any funds as he still has them in his possession, so i don't see this as a Reg E claim.

Although not stated, I presume it's implied that the customer gave the gift card info to the scammers who immediately drained the funds.

As has already been stated, the customer authorized the purchase of gift cards, so this is not a Reg E error.