I sell on ebay.com and use paypal.com as a payment option.
A guy filed a case with Paypal claiming the item was damaged in shipping. When the buyer contacted me about it, I simply told him no refund, no return, as listed in the item for sale on ebay.com.
My buyer then filed the case with Paypal. It took them about a month to simply email me saying that I agreed to pay back the buyer 100% of his loss in return for the item.
I called Paypal on the phone and they told me the decision was made and I have to pay back the refund. They also said that my terms of sale on ebay.com do not mean anything legal.
So a word of advice: if you buy with Paypal and are not happy, file the case. They will get your money back for any reason.
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