I know I am somewhat of "The New Guy" to these parts, but experience with PayPal and online purchasing is something I have in droves.
With PayPal the following is the best way to do buisness with them.
1) If you have to link a bank acct to the PayPal account, then open a new account at a different bank from your main bank. If your main bank is Scotiabank open an accout and TD, etc.... If there is ever a problem in the future at least the lions share of your funds in your main bank acct will be accessable to pay the mortgage, bills etc... Don't get caught with your pants down.
2) If you have to link a Credit Card to PayPal like most of us do, then get a separate credit card. PayPal is frought with problems when it comes to CC transactions. Research the marketlace and find a good credit card that offers good online protection, some of them even offer insurance for shipping in the CC annual fee. Look into it. Our bretherin in the USA have more options avaliable to them with CC's but Canadians can have good card too. Myself, I have a CC linked to PayPal with a very small limit. That way if they try to back-charge my card, or if I get into a dispute it doesn't hurt as much. Key is watch out for the PayPal charge-back scam. This can happen to you as a seller, and your CC company if it does not have good protection may make you jump through all sorts of hoops.
Yes this is a bit overkill, but after reading some of the blogs out there and listening to people's experiences on other forums I have been on I choose to aire on the side of caution and learn from other's mistakes.
Don't get caught with your pants down. In this case an ounce of prevention is worth a Pound of Cure. Always make sure you are shipping or dealing with a verified member. Read PayPal's guidelines, etc... They can really stick it to you at times if you don't cover your 6.
-Shane