PayPal Friends & Family listings. Why is this becoming so common?

@lalitk BTW, PayPal protection is worthless! I never relied on them to do right by seller or buyer. 

Maybe this is true sometimes.  I sold an LP on Discogs.com, and the buyer returned a different copy as if it were the one I sold him.  I marshalled all the photographic and messaging evidence I could, and PayPal supported me in the dispute.

“It seems like buyers demand around a 20% discount to take on the added risk of F&F. ”

I have not experienced that at all…my last 12 transactions on USAM, all F&F ranging between $16K - $150. I have sold items within 95% of my asking price. If a buyer wants protection, they can fork out 4% PayPal fee. IRS is a non-issue as you seldom make any profit when you reselling an item.

I should clarify, I see this situation happening when there is NO Paypal Goods & Services option. If you offer a 4% G&S option, that will build trust, and the buyer may decide that saving 4% is worth it. 

One thing I hadn't thought of before: Someone paying via paypal and in a few weeks damaging a product, then claiming item as broken to paypal.

This was reason I was given by a seller when I paid via PP (not F&F) and seller refunded my money as to avoid potential scam.

I've purchased several items with f&f with no issues.