Unfortunately you may be stuck doing a refund as you're dealing with intangible items. Per PayPal's User Agreement, items of this nature are not covered for either Buyer Protection or Seller Protection. Basically you are assuming all risk. When dealing with intangible items and refunds, many times PayPal returns the funds to the buyer. The policy does not seem fair but, it is explained and when someone opens a PayPal Account, they agree to PayPal's Policies. The downside of that is regardless of what your policies are, i.e., "no returns", etc., PayPal's policies over rule yours.
