Pay Pal

YY1 said
Not enough info.

What happened?

I never ship anything until I receive payment.

I never accept or use "friends and family" unless they really are friends or family.

I never refund until I receive the parts back at buyers shipping expense (and inspect them for damage not present before the sale), and I clearly state that in the listing, in bold print.

I have been known to give a partial refund, but those are extremely rare and and clearly documented via ebay correspondence.

I always insure the object via USPS (or whoever), and provide tracking.
It is the recipient's responsibility to deal with USPS for damage in shipping.

I also usually transfer the payment out of paypal immediately after receipt.
Paypal can refund a buyer from your paypal balance but not from your bank account.
I want to be in a position to agree with the refund before any money moves.

You are exactly right on all points. ( I haven't transferred money out of my paypal account to protect it though. )
That's what you have to do - play by the rules and keep everything documented via ebay correspondence.
I've been too busy to sell lately but I print my own postage from USPS and ebay was ,and maybe still is offering free listings for the seller.
Using readily available packing materials and by getting a discount from USPS you can keep most of if not all of the money you receive from an item. Sell something for 30 bucks-make 30 bucks. Have to operate in the way you described .