PayPal Help!

Okay, so my "friend" who had this wonderful idea asked me to help him... So basically, he purchased eBay gift cards from some source (probably carded), and wanted me to auction items so he can buy them, and transfer the gift card value into real money.

So we did this twice, I thought the worse that can happen is that paypal holds our funds if something is up. So first it was $200 GC value, and so after the transaction, the next day I transfered $100 to his account. After 3 days paypal holds the $200 on MY account, therefore I am -$100. They are asking for more details on the transaction.

The second one was of $500 value, and is still on my account, but it is being held and they are asking for details as well. They are asking if I have shipped the item or not...

What should I do? Should I refund? Send a fake object to address so I have proof?

What details are they asking before besides shipping info? If it is just shipping, send a cheap item you have laying around with delivery confirmation and there you go. Wait until the item is shipped then add the confirmation. Don't get in a hurry.

well the thing i have to find out is if this "friend" is the one opening the dispute... its unlikely because the funds are on hold right? Usually if the buyer opens a claim dispute then the funds wouldn't be held?

EDIT: it was issued by paypal, these are my options

How would you like to resolve this issue?

* I have not shipped the item and I would like to refund the payment.

* I can provide proof that the item was shipped through an approved shipper to the address on the Transaction Details page.

What information can you provide?

* I can provide online tracking information.I can upload or fax proof that the item was shipped.

* I have refunded the payment for this transaction.None of these apply to me.

still trying to figure out what to dooo!

i guess ill have to try sending a fake package...

Sending a fake package mail will do ...