Yes, it's possible, and there's small world of Craig's List buyers who are well aware of how PayPal works and it's policies. These people have actually read the User Agreement. Bottom line, one common tactic is claim an unauthorized transaction after they receive the item - PayPal looks at the transaction and if the sender sent you the money using the "friends and family" option, in many cases, they will refund the sender. Hopefully you have sent or plan to send the buyer an invoice, this way you have documentation that you actually sold something. Once the invoice is paid and you have the money, you can then ship the item. Don't deliver the item or allow someone to pick it up - you'll loose your Seller Protection, don't do any deals if the person wants to do a deal via Western Union, don't ship the item out of the country (that's another red flag if requested).