Quoted from
Re: Beware of PayPal and other reversible transfer services
Just as an FYI to anyone interest in using PayPal.
This weekend I sent approx $600 to a user via bitcoin-otc IRC channel. I sent this as a gift. He received the money then dropped offline.
I thought this is not a big issue I will just file a chargeback with PayPal -- DENIED.
So if you send a GIFT the only way it is refundable is if the SELLER sends it back -- PayPal told me this when I called them up.
There are some stories/options about the ability to LIE to PayPal and tell them your account got hacked etc you might get the money back but you will have your account closed/flagged.
Anyway I got my money back, eventually, due to tracking the guy down - he claims his computer credits ran out [in the library] and had some other issues. He refunded me as I said. So if he is lying or not I don't care. I got my money back.
tl;dr --> PayPal Gift payments are not able to be chargedback unless you lie to PayPal and have the account potentially closed.
I'd even be willing to send the cash as a GIFT like the user above said he did, but an escrow would be preferred if i did that, if someone like johnk was involved it would be even better..