Hello prashant1997!
First up, welcome to the community!
Providing good customer service definitely pays off, in my opinion; especially once your store on Etsy develops a reputation for itself. But as you've mentioned, going that extra mile can cost merchants. In your instance, I would suggest looking at PayPal's Seller Protection Policies to ensure that you're covered. If you follow this link, you'll find some further information on Seller Protection and how you can be eligible: https://www.paypal.com/webapps/mpp/brc/seller-protection-paypal-seller-benefit
Hope it helps!
-Ivan
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