Under Australian consumer law, specifically the Sale of Goods Act (each state has one) you are only required to show proof of lodgement with a carrier. If either EBay or PayPal try to enforce anything else then tell them you will raise a case with the Financial Ombudsman Service (FOS ). And while you are reporting also lodge a complaint with the ACORN about this buyer. Seems worth their investigation as well. If they are suspicious then details will be passed on to police. With both lots of this info presented to either EBay or PayPal I'm pretty sure you won't lose any money.