These stories are an every day occurence, yet I still catch grief from people because I won't take paypal.

Well I bought an ipod off of ebay from a seller in canada.  He screwed five others on ipods as well, and three people on high end notebooks.  I contacted paypal and they looked at the transaction and sai, good news sir.  You use paypal buyer credit (its like a credit line just through them), that covers you for the entire cost of the transaction, no deductable.  File your claim, he has ten days to respond.  He never did.  Money was credited against my balance.

As for that shipping scam.  The best way to deal with that is to open the package at time of delivery in front of someone from USPS/FedEx/UPS/DHL... whoever delivered it.  If the box is empty, or contains something other than what was purchased, you have a witness.  This then gives paypal's fraud team something to work with other than a he said/she said.  You might also have a bonus case of mail fraud if they used the postal system and they shipped an empty box or other item.  The postal inspector will take the word of a postal employee as to the contents of the box if they witnessed it being opened.

You have to keep in mind, paypal could get scammed too.  Yes, there is a deductable... but people working in cahoots could claim something shipped and it never did and play all kinds of insurance scams with paypal.  They do have a right to protect themselves.  The one time I've had an issue so far, they have addressed it in my favor.