Paypal rules only allow for the item to be sent to the authorised address registered in Paypal to be covered by their terms and conditions.
From
User Agreement
"A key eligibility requirement of the Seller Protection Programme is that, for tangible items, the seller must post the item to the address which appears on the transaction details page. If the item is delivered in person or if a seller posts the item to a different address (for example, if the buyer asks that you send to another address on the basis that it is a “work address” or a “gift” address) then you will not be eligible for re-imbursement under the terms of the programme."
Therefore it appears to be
@stpaulinus in the wrong, not
@Ianwallace
It's why whenever I accept Paypal for payment I DON'T allow people to collect the goods .. you have NO proof that they received goods that Paypal will accept, ie an online traceable tracking number from a known courier etc.