WARNING: Paypal gift payments

[FWH]

Please note, that the Paypal "gift" option has some limitations compared to using the normal Paypal payment method.

The "gift" option, is free of charge, but is not supposed to be used for paying for goods.

If there is a problem, and you have used the "gift" option, then Paypal will not be able to help you, as in their eyes, no transaction has taken place.
The fees you pay using the normal "for a purchase" method go towards paying to help you in case there are any problems.

Make sure you have enough in your selling price to account for Paypal fees. Use this calculator: PayPal Fee Calculator by Ryan Olbe (Last Updated: June 04, 2011)

Originally Posted by Paypal FAQ

The main difference between the two types of Send Money transactions is your relationship with the recipient. While “Send to a friend” is designed to send money to someone you know for personal payments, “Pay for a purchase” is designed to facilitate payments for goods and services to a third party seller or retailer. In this case, as with any purchase, it is important to make sure you are protected.

Full Paypal terms and conditions are available on their website.

If a seller insists on you as a buyer using the "gift" option, it would be wise to be cautious.