Always always always use escrow please, boys and girls. No exceptions!
Don't fall for the friends-and-family-can't-be-reversed claim. That's a myth. Reversing it is easy. The sender simply declares that he didn't do that transaction and is therefore an unauthorized payment. It WILL be reversed.
But why would I refund in the first place if I'm BUYING PayPal? Doesnt it defeat the purpose of me buying? I am bearing the risks, not the seller.