Unfortunately, unless the seller decides to be an upstanding individual you're probably screwed.
You can ask PayPal for proof of the account that the money was deposited in, which you can screenshot and send to the seller. That's about all you've got. If the seller still insists they don't have it, you're out the money, because there's no protections on "friends and family". If it's for a sale/purchase, don't use "friends and family"
I had a somewhat similar deal with a buyer here, he payed me, I sent the parts, and then he claimed he never got them. But I had a tracking number and had provided it to PayPal. They protected me from the claim he filed, even after I sent him evidence that the parts had been shipped and received at the address he provided. Just trying to scam me out of the money. After they resolved the claim in my favor he suddenly "found" the parts. Which is why you shouldn't use "friends and family" if it's actually "goods and services" and why you should always have a tracking number as a seller.
Only if you used PayPal for "goods and services". This includes a 3% fee from the sellers end that is used for the purchase protection. Very similar to a credit card, the fee on the merchant is what provides the buyer protections.
"friends and family" does not include a fee, but it also does not include any purchase protection from PayPal.
The problem is that sellers will ask people to send money "friends and family". If you do that, you have no protection at all. The better way is to tell the seller you will send the extra 3% to cover the fee. If they say no, well, they're a scammer. There's no reason for them not to accept the money as a sales transaction if you include the money for the fee. Unless maybe they're also trying to dodge taxes, but again, that tells you they're shady anyway.
As long as you follow some basic rules and do your own due diligence, buying online can have just as many protections (and in some cases, more) than buying in person.
