(1) Customer initiates a chargeback. You contact the customer, they tell you by email they just didn't recognize the name on the credit card statement. They also say by email the merchandise was received and they were very happy with it. I gave this email to Paypal which then sent it to her credit card company.
(2) Her credit card company closes the file anyway in her favor. Paypal says there is nothing they can do plus I'm charged $10 for the chargeback.
(3) Can I turn her over to collections? What would be the next step?
It is the processor that charges you the fee. My processor (First Data) said this fee is charged because they are forced to deal with the paperwork from visa, mc, or amex when a chargeback is issued. If I get the customer to sign something saying the dispute was made in error I usually can get First Data to credit me. Your lucky it was a 10 dollar charge, first data charges 30.