Chargebacks
Here is PayPal's info on chargebacks.
In the case you get a chargeback, immediately email the person that initiated the chargeback via the email provided in the PayPal notification.
Everyone's approach will differ but I suggest politely asking for them to reverse the chargeback and attach the Delivery Confirmation document that has all their personal info. This has worked for me on a few occasions. Usually, the shock that you have all their personal details, photo, ID, and home address are enough to get the job done.
You can find the disputed transaction by entering the email they used in the PayPal chargeback or their first and last name by using the search field at the top of the Xcoins activity page. Here you can download the Delivery Confirmation with all their personal information at the bottom of the page. Attach that to your email.
Here is a template you can use for your email response.
Hello XXXXX,
I recently received an email from PayPal stating that you had reversed a payment to me due to an unauthorized purchase. PayPal has taken money from my account due to your claim.
If your claims are true, I will be forwarding the attached information to local and federal law enforcement to assist in the apprehension of the criminal that is using this email address to committed identity theft and has used a computer to commit fraud across state lines.
If this was a mistake on your part, I ask you to cancel the reversal with PayPal immediately so we can avoid involving law enforcement. I have attached the delivery confirmation for your reference.
I will give you 24 hours to reply or to cancel the chargeback after which point I will proceed under the assumption that you have intentionally committed this fraud.
Thanks,
XXXXX
Also, immediately mail a certified letter to them with the delivery confirmation info from Xcoins enclosed so you have a tracking number to submit to PayPal's automated system. That method seems to win the automated disputes most of the time.
If you do not hear back from the person who initiated the chargeback within the 24 hours, go ahead and submit the tracking number into the PayPal dispute. Do not go into detail with PayPal about the transaction, simply state your reason for the dispute is "Item shipped". The 24 hours also gives the tracking number time to register on the USPS site.
If you want to save yourself a trip to the Post Office or live outside the US, you can use Click 2 Mail to print and mail the delivery confirmation and provide you with a tracking number.
Do your best to avoid contact with any PayPal employees as that's the best way to get your account frozen.