I had the exact same thing happen to me, a buyer failed to read the "pickup only" listing (on ebay) as well as my personalized ALL CAPS description stating there would be -- NO shipping. Instead the buyer paid via PayPal and proceeded to turn right around and email me stating they did not realize this, but would be willing to pay for shipping. I informed them this was not possible (which is the reason I listed as I had) and that I would look into the proper method of refunding, (i.e. cancelling the sale on ebay which generated the refund via PayPal). In the end while I was refunded my selling fees on ebay, there is no recourse with PayPal so I'm out the refund fee due to buyer error. I spent way too long on the phone with both eBay and PayPal just explaining the principle of my position neither of which would do anything because this senario apparently hasn't been considered by either company unfortunately. I would have one-off it, but I've already had a similar instance in the past where my item was bought, but unpaid so no charges, but annoying still. If it happens again I just stop listing for pick up period. Welcome to the club!
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