Seems like the shopkeep may be handy with an arrow, not a sword. Maybe the Demon Lord is arrow proof, which had to be a big bummer for "Dave, the legendary arrow hero," so he setup an honest shop to help out.

Unfortunately, times have been tough for Dave, what with the Demon lord running around, so even though he wants to help, he needs that 500 gold to keep his family and likely most of the town fed. He can't just let that 500g go. It means to much to too many, and Dave isn't about to trade that many peoples lives away for a "maybe," chosen one or not.