I have had a business paypal account for 10+ years and I have had zero issues, so I will speak from my experience.
I sold a little bit on Ebay 9-10 years ago when I upgraded to a business account. No holds whatsoever and I remember seeing a lot of people complaining about being scammed an having no recourse. You would pay for your auction, and the person would take the money and run and you couldn't get it back. Then they got stricter with making sure a bank account or credit/debit card was added. Then they started adding in verifying your identify periodically (which I have done 3x so far in the past 5 years). About 3 years ago I decided to list some more stuff on Ebay and I got smacked with the 21 day rule. I was so annoyed because I had an account in good standing for a while. So I sold a couple of things, put in my tracking info. I didn't have to wait the 21 days. I think it was maybe a week on the first sale. When the person confirmed it delivered I got my money. The next 2 sales went the same way and then the limit was lifted. I have sold various goods since and have had no hold.
So what I am getting at is if you If you habitually have chargebacks, refunds, disputes, and never provide tracking information then you pretty much deserve to have that 21 day hold because you haven't proven yourself to be trustworthy.
As far as buyers protection goes, yea of course they have buyers protection. You are buying stuff from a stranger on the internet. Everyone should have recourse if something they have purchased is not at all as described or is damaged. All credit card companies have charge back polices, anyway, that are typically up to 120 days. The dispute process directly with a credit card company is so so much worse. They contact your bank and instantly take the money in dispute. If the dispute is found in your favor, they refund you. If it is not, it goes back to the customer. And you have to jump through whatever hoops they ask you to and provide whatever documentation they want. And some cards have their own rules. Like Discover doesn't allow you to contact the customer once the charge back process has begun. You can't even try and make it right with them. And even if it is found in your favor, you as a merchant STILL end up incurring expenses for the process. Plus, you have to take into account that some of these charge backs are going to be due to stolen credit cards/fraudulent purchases. People don't get refunded out of thin air.
Buyers protection should be the last step a buyer should be taking to get recourse. You need to establish a fair return policy, up front, when you set up your store and a way to contact someone if they are not happy with the purchase. You cannot go into opening a retail store with the mindset that there will never be any returns or people who are unhappy with the Chinese quality of goods you're are selling or how long shipping takes. Plus you can never provide tracking information to your buyers or Paypal so that doesn't look good to either of them.
Put yourself in a customer's shoes when you look at your shop. Would you really buy from it? I get that people want to make a quick buck and think dropshipping is the key since you don'y have to invest in inventory. But you end up with all of the same issues and headaches a normal retail store ends up with so you need to be prepared.
So, yea, Paypal isn't the best when you are trying to do something like dropshipping.
