Some merchants certainly are. And in GP's case, PayPal might be playing the role of merchant, since they technically took the payment. I wonder if they just offer refunds to avoid having to accept chargebacks as such.
Yes, PayPal is the merchant, and as the CSR in the Ireland call center explained to me, they HAVE to issue the refund, or they risk extreme fines (the representative also told me PayPal could "lose the license to accept payments", but I doubt that, given their size. Regular merchants would, but PayPal is too valuable, so it would just get extreme fines and higher processing fees).
I believe this to be a case of telephone (no pun...scratch that, pun definitely intended). That sounds plausible, so the CSR probably believes it and regurgitated it. But chargebacks do not signify immediate fines (or else a merchant would never take cards!). An inability to counter chargebacks with evidence of your compliance is what gets a fine. If you swindle your customers and they file chargebacks, you have a problem. On the other hand, if you have a (or had a) customer who tried to game the system, but you have proof of purchase, good faith attempts to resolve, and written rules that are clear, conspicuous, and reasonable, then you can fight them successfully. PayPal just doesn't care, and apparently neither does their merchant bank.
