The buyer in Italy started a dispute with Paypal stating that the item I sold to them was not working properly. I received an email from Paypal stating that the buyer was returning the item and that there was no tracking number and no courier company given. I get another email stating that the item has been received by me and that the buyer has been fully refunded. I got all the emails within minutes of each other. I call Paypal and they say that there is no requirements to supply tracking number from Italy. I asked them to send me the proof of postage that the buyer has supplied but they say that this would be a breach of the data protection act. I then asked what would happen if the royal mail/parcelforce lose the item. They said that I would have to contact them to get compensation. I then contact Parcelforce and they said that they can track the parcel once its in the Uk and that only the sender can ask for compensation. The buyer has refused to respond to any of my emails since the dispute had started.

Now I have a negative balance of 870 and no item. My plan is to not put money into my paypal account until I receive the item.

Is there anything else I should do?