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The UPS delivered a day late, so the seller should have recouped that loss. I believe it is against PayPal's terms for him to charge you their 3% in addition to sale price, so it's interesting that he expects you to follow his invisible TOS when he's clearly not following PayPal's.
Regardless, He said he would make it right and didn't, his word is not to be trusted.
"NO live arrival guarantee" = run like HELL.
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