Originally Posted by woopwoop

I don't know how paypal are able to refund the money even though the items were transfered (unless a stolen credit card was used) but they did, leaving the seller without the money or domains.

Originally Posted by From PayPal Policies

13. Disputes between Buyers and Sellers - Buyer Protection Programs.

1. 13.1 Buyer Protection Programs. If you buy an item using PayPal and either do not receive the item or receive an item that you believe is Significantly Not as Described by the seller, we encourage you to open a Dispute with the seller in our Resolution Center. By doing so, you will initiate our Online Dispute Resolution Process—a step-by-step system designed to facilitate communication between you and the seller in order to get resolution of the issue. If your dialogue with the seller fails to produce a satisfactory result, you can then escalate the Dispute into a Claim that we will evaluate for reimbursement under one of the following programs:
   1. PayPal Buyer Complaint Policy - Our best efforts program to reimburse Users for losses only to the extent we are able to recover the funds from sellers.
   2. PayPal Buyer Protection Policy - Our program to reimburse Users for losses for up to (i) $2,000.00 USD (Top Tier Coverage Amount) for eligible items purchased on eBay and (ii) up to $200.00 USD (Basic Tier Coverage Amount) for all other eligible items purchased on eBay and for eligible items purchased on eBay. Please see section 13.9 to determine whether Top Tier Coverage Amount or Basic Tier Coverage Amount applies to your eBay purchase.
   3. Buyer Protection for eBay Express - Our program to reimburse Users for the full amount of losses for items purchased on eBay Express.
   4. Extended Buyer Protection with PayPal Credit - Our program to reimburse Users for the full transactional amount of the items purchased using PayPal Credit.
   These programs only cover payments for tangible, physical goods. All other payments, such as payments for intangibles, services, airline flight tickets, or licenses and other access to digital content are not covered by any Buyer Protection Program.

13.8 Claims Eligibility. In addition to the other limitations called out within this Agreement, the following limitations apply to Claims:

Claims must be for payments for tangible, physical goods that can be shipped, and not all other payments, such as payments for intangibles, for services or for licenses and other access to digital content. For purposes of eBay items, motor vehicles and Live Auctions are not covered.