I had a refund demand from someone who got the product and then demanded a refund months later. I refused and paypal paid it anyway and shut my account down. I lost my paypal account over just one refund demand although I had a long history of giving refunds without question in the event of customer dissatisfaction.
paypal is no good in my books and I highly recommend that marketers stay as far away from them as possible.
Although good advise to stay away from PayPal, but what else is out there that is better? I have been online since the mid 80's and I have tried almost every payment processor out there and as much as I do not like PayPal they are still better then the rest.