Buyer opened dispute, I gave my evidence, PayPal gave SELLER ISSUED REFUND????

[Jlst]

I'm so angry! I make digital artwork and a buyer contacted me asking for a commission. I happily agreed, he paid me $40 and I provided the artwork. A week later he opens a dispute stating unauthorised access to his account, which is a lie as I have screenshots of him agreeing to pay me. I go to my Resolution Centre, click to resolve the problem, my options are:

1. I have not posted this item and wish to refund

2. I have posted this item and can provide tracking details

3. (Forgot this one if there was one)

4. None of the above apply to me.

I clicked none of the above apply to me since obviously I have no tracking number for digital artwork. PayPal then asked me to provide the address of the buyer so they can link the address provided to the one on the account and prove it was him. I wrote 'N/A' in that box and then in the additional notes part I wrote about how the buyer paid via friends and family so I obviously didn't have an address and he no doubt planned this all along to pay that way so I didn't have his address. Explained what he purchased etc.

He's blocked me on Facebook and I can't seem to find his generic name profile on any other accounts now either. It didn't let me upload my screenshots there like it's let me on similar pages in the past when this has happened, so I wrote in the box asking where I can send my proof to. 

It then asked for my phone number for them to contact me to discuss further if necessary.

The second I clicked submit, the money stopped pending and went straight out of my account labelled "Seller issued refund." I did no such thing!!!!!!! If I wanted to refund this piece of garbage I'd have clicked the first option! Since when does "None of these apply to me" equal "Please send him my hard earned cash" because I was unaware?

Anyway now it won't let me reopen the case so not only have I spent hours of my time working on a commission for this human waste, but I've also lost $40 AND lost out on money I could have earned by working for someone else!

Any advice? I will be phoning PayPal in the morning which I'm guessing will be my best bet, but I'm so angry that they opted to give him a refund as though I'd opted to!!

[kernowlass]

@Jlst

Its against paypal rules to sell items digital or otherwise and accept payment via friends / family.

Because you did you lost all paypal seller protection so of course that is why you lost any dispute.

[Jlst]

I did not ask him to send via friends and family. They did not even consider my case. As soon as I pressed submit it was as though I'd clicked to refund. Even if so then sure, I don't get my seller protection, but what he did is FRAUD and if he sent me money as FRIENDS AND FAMILY then that money is money sent to a friend and should not be for reversal. Especially when I have proof he was sending me money. If it was cancelled due to him sending as friends and family then they should have just refunded the money AND sent me $40 from his account via goods and services with my sufficient evidence. 

[kernowlass]

@Jlst

If you received a family / friends payment then you should have refunded and ask them to use the goods / services option OR sent them a money request or invoice.

They would not consider anything to be honest as you have ZERO seller protection for accepting the payment that way.

You are correct in that your buyer was in the wrong as well as he should not have sent the payment that way but if you or he did not list on the payment what it was for ie goods then as far as paypal was concerned he did not pay for goods but sent a 'gift' payment via family / friends but later changed his mind.

Paypal can't 'take' funds or force someone to pay, the only time they can 'take' funds if its in someones paypal balance and its because they lost a dispute.