Selling etiquette

The buyer is the one taking a risk when they send funds "friends and family" - PayPal won't stand behind the buyer if the seller doesn't deliver, because the buyer told PayPal it was not a goods or services transaction.

IMHO, for buyers, the friends and family workaround is an unwarranted risk, unless when doing business with someone you know and trust. PayPal fees are 3% (2.9% + 30 cents per sale), so it's only $3 per $100, and is a small price to pay for some peace of mind.