PayPal dispute can be escallated to PayPal staff as a Claim.
Or Seller/Buyer can come to an agreement (partial refund for example).

These are usefull quotations regarding question "how to win PayPal dispute"

General dispute tips:
- "all you can do is come up with a good story and cross your fingers."
- "pretending to be a dumbass is always the way to go. this is usually how i win my dispute..."

Buyer dispute tips:
- "Pay with a credit card, then just issue a chargeback ... issue the chargeback through your bank ... if the buyer initiates a charge back through his bank and paypal usually bans the buyer's paypal account for doing this as they hate being forced."
- "If you are opening a dispute case be sure not to "mention" that you bought virtual goods because you will lose that case 100%"
- "Always send payment, and claim that it's physical. So that if you ever got scam, you can always ask for Shipping ID , if they can't provide. Then You will get your money back."
- "file it as an unauthorized transaction and escalate it to a claim right away"
- "If PP don't find in your favour, I turn to the credit card company and initiate a chargeback. It worked for me."
- as a seller: Simply escalate it to a claim and let PayPal know that this was a sale that didn't involve a tangible good/product and they'll immediately close this dispute in your favor
- "Paypal will favour the buyer if he says goods were involved"

Seller dispute tips:
- as a seller: "You put in the dispute comments section "virtual service" - they will favor in your side because they can't ship back the "goods"."
- As a seller: "In most cases, all a seller has to do is say the purchase was an "intangible good" and they win. I have experienced this quite a few times myself."
- "PayPal believes that sellers do not lose anything of actual financial value if they sell an intangible product and then refund the customer. Source: PayPal Representatives - eBay Live, Philadelphia 2012"
- as a seller: "if the seller makes it clear during the Dispute or Claim process that the product is digital then the seller will win every time. As a seller, I have won 100% of the disputes and claims against me. "
- claim was won by seller when seller mentioned "Services sold as virtual, digital, or intangible, which are not honored under PayPal Purchase Protection shall NOT be refunded, only claims involving physical items that can be shipped and/or tracked will be considered eligible for refund." which is also quotation from his TOS where he also mentions "ALL SERVICES SOLD BY COMPANY.COM ARE SOLD AS VIRTUAL, DIGITAL, INTANGIBLE GOODS".