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Paypal can do whatever they want, their TOS pretty well says they are GOD.
I had a customer make a claim, non-delivery of goods, they wanted a full refund. I provided them with FedEx tracking and a copy of their signature where FedEx made them sign verifying delivery. Paypal still gave them the refund. A couple of months later, I was discussing the situation with a large group of people that sold the same goods as I did. Ends up that individual has scammed 4 of us through paypal exactly the same way. Appears she found out how easy it was to get what she wanted for "free" and she just kept on doing it.
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