Must admit, I Hate paypal.
I once priced up a new computer, and there was this advert for Aria or Scan or someone like that with a big bonus if you buy via PayPal.... Anyhow, I thought why not - I was going to buy said parts at the site anyhow so why not try to get the bonus.
Purchased said parts and then went to claim reward, was told they only paid it once the warranty expired on all goods I purchased. They said that as such they had to wait at least err, 2 years I think it was, before they could process the claim. Eventually they said it should have been one year (once I could no longer return to retailer). Having lots of spare time on my hands I contacted them regularly and each time was told I had to wait. Then about a year or so after, they said that they had no record of the purchase to said company (I sent them a screenshot of their own transaction page) and they said that the claim wasn't processed in time, I quoted all of the old emails to them and we went to-and-fro quite a bit..
Regardless... That was a bit of meh, but I have seen them make other mistakes and never refund for it.
Living in the UK I once sold something to a US pal. They managed to convert the money 3 times in total (taking a charge EACH TIME!) and refused to refund it. Overall the fee was quite large. Not a happy bunny (that's when I quit using them).
I also have tried to "close" accounts for family who have had the owner die. You get the impression that the account is closed, BUT if you monitor the email addresses on those accounts you will see that after a few months PayPal will start sending out emails again, then follow up with offers and pre-approved goodies. Log in for your reward, statement, whatever. If someone ask me now, I delete all information/cards/everything in the accounts, give it a super-secure password, and change it to a random super-long-name email for gmail and then ask for the account to be shuttered. There should be no reason why an account can't be closed.