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I fell into the same Scam and getting a cheap item.
I filed a claim and got the same result, pushing the date and this seller wanted to pay a partial refund. So, reading into this community, I knew, I had to return the item, so I called PayPal and explained everything and mentioned that many people fell into this, so, now on this company will be removed to use in PayPal and I got my full refund. (I think I was lucky).
Lessons learned: Do not buy anything from China
You got farther than I did (I was being told to ship it back at my own expense). But we both ended up in the same place: trusting paypal for transactions and being told Paypal sided with the scammer. I'm sorry that happened!
Yep got the exact same issue with the exact same company and PayPal are doing the exact same thing - essentially protecting the scamming company and forcing me to be out of pocket for returning the item at my own cost and then again for the products which I'm sure the company has no plans on actually refunding me for.
DO SOMETHING PAYPAL!