Recently, I just went through this WHOLE THING with eBay & PayPal and can describe the process. I'll try to explain this briefly...
I do not carry a PayPal balance, and have been using my account since the x.com days, so I've seen a few scams.
I sold a TV speaker on eBay advertised as NEW. The buyer made a claim saying it was missing a part. I fought the dispute and won. Buyer then files a dispute with PayPal by issuing a charge back. Note: the person is the problem, not PayPal. Now in my case buyer paid with a credit card, so it may be different if the buyer used a bank account or PayPal balance. Now PayPal immediately withdrew the transaction amount (by law as OP stated) + a pesky $100 charge back fee, which I fought and got waived. The buyer does not have to return the item. The buyer does not have to prove anything. The seller can only give their side of the case to PayPal. PayPal will fight vigilantly on your behalf. However, there is a mandatory 75 day waiting period. Since I do not typically carry a PayPal balance, after 21 days I still had a negative balance and started getting nasty emails. After another week or so, I could no longer call PayPal to discuss and would be immediately be transferred to collections. After 37 days, I think it would appear on my credit report so I paid the negative balance. At this point, all you can do is wait. 9 out of 10 cases are won by the buyer, mainly because the seller wasn't prepared to fight with proper documentation. If you lose, your best recourse is small claims court. In my case, I was fortunate and won and winning the eBay dispute certainly helped. It's a risk to sell in the sense that credit card companies view you as a store that should always accept returns for whatever reason, but that is not true as most people do not operate as such. Understand that PayPal is not a bank, they are merely a payment processor, so if you sell a lot, get seller protection from them.
Paypal issue beware.
I sold a $1500 amp to someone here notified after delivery had physical damage to it looked like it was dropped. Anyhow contacted UPS to process a shipping claim. In the mean time he filed a pay pal case. Fine told him we would go through that process. PayPal goes and gives him back his money with out tracking or evidence he sent it back! I call they said because he used some sort of mandated government payment they do not require any evidence that it was shipped back.
What type of payment is this?
So the guy can order stuff put in a case saying it did not meet description and get money back with out returning a item? This makes no sense will never sell using pay pal again. Just spent an hour on the phone with them. Also I want to know what type of account this is seems like the best scam going order a whole bunch of crap say it didn't meet description and get money back and not have to return it. I'm out $1500 paypal even charged me the fees for there great service and I don't have my product back! I don't understand how this is allowed.