I recently had a problem with a customer using PayPal that has made me so paranoid that I can’t even do business anymore. This lady made 35+ small deposits on my site (all for only $1 or $2 each), and then charged them all back at her bank. PayPal fought the chargebacks for me with the information I sent them, but the bank sided in her favour and I had a thousand dollars in chargeback penalties over maybe $50 in sales. The lady then came BACK to my site after getting awarded her chargebacks, and bought dozens more. I block her IP and she comes back with a different name and IP. SO finally I gave her a million dollars in free credit on my site just to keep her from depositing more money and charging back. It was the only thing I could do.
ANYWAY now another person is making a dozen $1 deposits every day for the past week. It is a verified PayPal user in the UK. But I have tried to write her 3 times over the past week to confirm she is legitimately making deposits on my site. I get no response. I’m so afraid that some day I’ll get $3000 in chargeback penalties for this person too. I am using the paypal fraud protection service and its not flagging her payments, but that doesn’t give me 100% reassurance.
I’ve started to refund all her payments to me and I guess I have to block her from my site, but yet she is probably a legitimate customer 
So here are my questions:
(1) PayPal says there is no way for me to determine if the customer used their paypal balance or a credit card directly. So is there any way for me to know? I assume that people using a credit card through paypal without having a paypal are riskier because they would chargeback at their back, rather than opening a dispute on paypal (which is something I would have a better chance of winning since banks always side with the cardholder). Can I change my deposit for to ensure anyone who sends me money has a paypal account?
(2) How can I prevent people from making stupid $1 deposits, 15 times in one day, instead of just depositing $15? If they charge back on 1 payment I get a $15 or $20 penalty which I can live with. But 15x20= $300 in penalties which starts to add up. My deposit form defaults to $10 as the minimum but they just type a different number in.
In case it matters my site is fortunesnow.com we sell automated readings.
Thanks for any advice from other merchants out there. I’m totally afraid to do business anymore and don’t know what to do.
PS: Calling the customer won’t help either. I don’t have time to call overseas and play phone tag, and I would still lose the chargeback appeal because I have nothing in writing. Saying I talked to them on the phone isn’t proof. And they don’t reply to my emails. Maybe I have to get them to fax ID?! 