jwolthuis - 3:29 pm on Sep 9, 2011 (gmt 0)
Regarding their API, you can require confirmed addresses, but that doesn't prevent orders that are "partially eligible" for Seller Protection. If they are funding their PayPal account from a bank account, the transaction hinges on the bank account funds.
The issue is that the banks routinely say "Approved" one day, then "Denied" 3 days later. PayPal is simply the middleman, so they cover themselves with the "partially eligible" clause.
For "partially eligible" payments, we look at the size of the order. For low-value orders, we don't sweat it. For high-value orders, we sit on them for a week (due to a temporary out-of-stock situation), to wait out a possible reversal.
I would send your customer a PayPal invoice, and give them 3 days to make this right.
On the third day, I'd inform them that your next call is to the <insert town name> Police, as he is in illegal possession of your property, and to expect a knock on his door to retrieve the item(s).