Paypal and Ebay advertise quite heavliy Paypal Seller protection. What they fail to let you know is that if you are to be covered by their seller protection then you need to have sent the item out using a traceable method ie recorded, special delivery or by another tracable carriage company. Simply sending something out by 1st class or 2nd class post is not enough and you WILL NOT be covered.
The same goes if someone collects the item from you. You are NOT covered. As there is no proof that that item has exchanged hands.
They fail to tell you this until it is too late.
So my advise to you is to send all items out 1st class recorded however small as this is the only way you will be covered in a claim case. It cost's 72p for recorded.
If it is an item of high value ie a car, jewelry, computer console and the winner wants to collect the item then don't accept paypal as a method of payment as if there is a problem you ARE NOT covered. Best ask for cash, bankers draft or cheque.
I hope this is of help to some of you.