I got an email today from paypal saying that someone had initiated a credit card chargeback for an etsy order. It claimed that "this purchase was made without authorization to use the the credit card".
Since I hadn't shipped the item yet, I thought it was a bit weird but I would go ahead with it and cancel the order. I did so, and 5 minutes later got an email from paypal saying that their bank had charged them a fee for the chargeback, so they in turn charged me $20. So now I'm very annoyed at being out $20.
I hadn't been contacted by the "buyer" at all. The etsy ship name and address was the same as the paypal info for the person, and from thier feedback I could see they had made prior successful purchases on etsy. So I'm a bit skeptical that it wasn't fraudulent card use and just impatience. (my shop has a 14 day production time on everything, today was day 12 and I was about to ship it this morning). I should have checked with them first before saying okay to the chargeback.
So - if you need to do a chargeback on someone, ask them to refund you via paypal first. And if you get a request for a chargeback, refund via paypal instead of saying yes to the chargeback. Or else you'll be out $20.