Can someone who sends money via PayPal later revoke the transaction?
Yes, very possible. You can get your money back up to a certain amount of days, depending on local laws. It says it right after you send it. Mine for example states that my state allows up to 120 days.
I would have the person buy keys, from someone else, with their money. That way, you can get the same amount and if they are scamming, at least it isn't you that pays the price. Let the key seller decide for themselves.
People ask me all the time if I will trade for Paypal, but I rarely accept it. I have to really want the deal or believe that the person is legit, before I am willing to take it.
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Chargebacks are a worry, so for PayPal trades, I require the other user have SteamTrades reputation going back at least 6 months, and often a minimum of 50 trades with different users.
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With digital media, PayPal will practically always allow the refund. If you can't live with the loss, then don't do it.
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I'm trading w/ someone who wants to use PayPal. He offered to go first - is there still a way I can get scammed?
EDIT
What are the requirements for chargeback? Does he have to have proof I scammed him, or can he just do it no matter what? What if I spend it first?
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