Paypal has a bad rap for online person to person deals because of the protection schemes in place. It's far to easy to say your account was hacked and reverse a transaction.
I sold some digital codes to a guy. He later claimed his account was hacked and asked for a reveral. Fortunately, I had a seller protection. So I did not have to refund.
How much did you pay for seller protection and does seller protection waived the buyers right for refunds?