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Paypal does not have any protection for digital goods sales, even though it states "If this is a digital goods transaction, please provide the download date and time for the associated purchase through the Resolution Center to help us dispute your case."
Every time I disputed the case, I lost the case, I lost my product (they redeemed it) and I lost $20 for each transaction.
There is no way to win, no matter what proof you give paypal, YOU WILL LOSE. It is better to take the loss on the product by giving a refund, than to dispute with evidence, and then you lose $20 on top of the loss of the product.
I recently had 3 disputes in a row for 3 of the same products, by different "users" (they are obviously the same, since they purchased all at the same time, and disputed all at the same time), but I had no choice but to refund or face the wrath of losing more money.