Well, I think anyone who has sold has run into some serious problems when dealing through Paypal. Being an experienced seller, I will share some secrets as to how to protect yourself against chargebacks, and frauded money.
To begin, we'll take this from the approach of a GP seller. In other words, you are selling GP for Paypal money. First of all, it's important to accept the facts:
1) You can't prove to Paypal you gave them the items
2) You're breaking copyright laws
3) Paypal deems Virtual Currency trading as risky, and will Limit accounts that they find doing it.
With these in mind, it becomes quite obvious that you don't want to get into disputes when dealing with Paypal. You aren't going to win. So, here's the way to avoid getting ripped off.
1) Be realistic.
If someone is using THEIR money, realize that they are going to very careful. If the buyer is offering an abnormal price (6-7 dollars per Mil USD), then that's a good sign they're fake. Also, if they publicly say they'll go first, be very cautious. People using their money usually are verrry hesitant about going first, unless you have a great reputation.
2) Talk to the customer.
Talk to your customers on MSN before you do any transactions with them. By simply chatting on MSN, you can usually get a decent idea of where somebody is really from, how old they are, and why they're buying the gold. If your customer can't speak proper English, and seems childish, be careful. Also, if someone is rushing you to do a trade, just block them. Anyone rushing to trade you is trying to make you act against your judgement.
3) Ask for some Paypal information
Before your customer even pays you, make sure his account is VERIFIED. Also, it's extremely important that their ADDRESS IS CONFIRMED. These two factors are extremely important if you wish to protect yourself. Also ask them if it's their account, or their parents. Also make sure the address on their account is listed in the phonebook, and is their current place of residence. If your customer hasn't passed each criteria here, you leave yourself prone to chargebacks. Also tell them you will be calling their house, to verify their location, with the address you get from their Paypal account.
4) Have them include a note with their payment
With every payment you make on Paypal, you can include a Note, or a Memo. This can help you prove that your customer received their item. Have them include a message like "Thanks for fixing my site for me!" or just "I received my item before this payment was made - I promise not to chargeback". This is a good little measure to help protect yourself. Try to avoid using the word Runescape, because Paypal does not like people trading virtual currency.
5) Call their listed number.
After the customer has paid your Paypal, click the Details on his payment. Make sure they included their Confirmed Address in the payment, which is displayed here:
Now, call their house, by checking at whitepages.com for the phone number that corresponds with their address, by doing a reverse address search:
Call them up. If the account is under their name, their consent is all you need. If it's under their parents' name, tell them you need their consent for the payment to be accepted. This is extremely important. This step proves that the account being used is not stolen, and therefore an Unauthorized chargeback can not be filed.
By following these 5 steps, you have eliminated the vast majority of Paypal scams. The most devastating scams usually involve people paying you from stolen accounts. This guide aims to prevent these scams, and in turn, keep you out of the red.
Remember though, Paypal will always carry SOME risk.