If the purchase was funded with a credit card, you can apply for a chargeback with the CC issuer. You still retain your CC chargeback rights when you use Paypal, regardless of what they will have you believe. If the purchase was funded with a bank account or Paypal balance, you are out of luck. Paypal is very dangerous for transactions over $1000. In the future, consider Escrow.com or a third-party domain broker escrow such as Afternic. Paypal NEVER offers more than the standard buyer protection plan (which is up to $1000 assuming it is a tangible item and the seller is Verified, etc), so if they offered you an amazing 50% of what you paid, you have to KNOW you're able to get your money back some other way and they want to settle. If you win a chargeback with your CC and the seller's PP account is empty (sounds like it is), PP is left with the bill. That's why they want to settle. Now, hopefully your client used a CC. Tell him to go file a chargeback.
Yes I was able to get my clients money back by going through the credit card company, I just wanted to try paypal to see how they would respond, I have heard many a horror story about them so I wanted to see myself just how it would go. Thing to remember... Always use escrow if you can!!!!
it is so weird that...whenever you are - a buyer, you file a dispute... seller wins because it is intangible goods... - a seller, buyer files a dispute.... buyer wins because it is intangible goods... i always thought that paypal favours the buyer... in your case, you are the buyer... why you didnt win the case since it is intangible goods that seller cant proof that he sent you the stuff. in my case, there has been 5 disputes, i am the seller of websites/services, and buyer files a dispute... buyer won.. i lose. reason is, intangible goods.