Quoted from Trekkie1978:
Can anyone answer his question:
After the credit card company gives you a chargeback, do they then in turn go after Kevin?
They first send a document to the merchant indicated the chargeback request and what the customer is claiming as the reason. In theory Kevin is the merchant, but not sure how that will work with Paypal, they may be considered the merchant, and they would then likely send Kevin some paper work (not sure how paypal handles this). The merchant then has X days (7 to 14 days?) to challenge the chargeback by providing an explanation and evidence as to why the chargeback should not be granted.
If no response is provided by the due date, then the money is returned to buyer and deducted from the merchants account. If the merchant responds, then the bank/credit card makes a determination as to whether the charge back should continue. They typically go back to the person requesting the chargeback if there is response to report back and give them a chance to rebut what the merchant says. I've seen cases where it ended up not being all or none, but a partial payment.
With credit cards (can't say with paypal), they typically will catch a refund attempt against a charge that has already been charged back and vice versa (in my experience you can't refund a credit card charge against the original transaction for more than the amount originally charged).
Given this freaking disaster, the whole refund thing (if kevin ever even attempted it) could be a lot more problematic with paypal in the middle.
Unfortunately I have been on both sides of this, but never with paypal involved.