Hi greatgodpan, no doubt I'll be shouted down by the usual chorus of dissenting regulars but you ARE covered under the Paypal Seller Protection Policy and Paypal have erred in finding the buyers favour. This does happen frequently but to Paypal's credit, they are usually very quick to rectify the situation once the matter is bought to their attention.

You need to call Paypal, ask to speak to a supervisor and quote the following -

https://www.paypal.com/au/webapps/mpp/customer-concerns#lb1 (scroll down to proof of shipment where you will find -

At the very least, your documentation must include the date the item was sent, plus one of:

An official acceptance by the shipper, such as a postmark or online status (status that shows the item was delivered is also acceptable), or

The recipient’s delivery address showing at least the state, city and postcode (or international equivalent), or

A receipt from Australia Post showing at least the recipient’s suburb, city or postcode (or international equivalent).

In the unlikely event that Paypal does not reverse their decision, inform them that you will be referring the matter to the Financial Services Ombudsman. Usually this is enough to get them to reconsider on the spot but if not, make good on your threat and the FOS will ensure that you are refunded.

It would also be great if you could post back here once the matter is finalised to demonstrate to the doubters that an Aus Post receipt with postcode is indeed sufficient to be covered 🙂