I have been taking payments through paypal for years. They sent a letter about the refunds, about 1 year ago. What it amounts to is that if the seller issues a refund to the buyer paypal no longer refunds their part of the transaction. They used to. So if I sell something and want the customer to get a 100% refund I have to add the paypal amount. I will lose money by doing so. The seller you dealt with knows this too.
