I bought a piece of video game memorabilia on eBay and it turned out to be fake. The seller (a bricks and mortar business selling video game/anime related goods based in the UK) admitted in eBay messaging that all his items are counterfeits. Screenshot:
http://img849.imageshack.us/img849/4751/g84g.jpg
Paypal "ruled" in my favour. I use the quotes because the ruling was made within 5 seconds of me clicking the submit button.
Paypal's automated claim process forces you to send back the item via tracked shipping before they will process the refund. In this case Pack and Track to the UK would cost more than the disputed amount. From the seller's response I think it's clear that they are aware of and are indeed counting on exactly this.
Despite the seller admitting to selling nothing but fakes via eBay messaging (which eBay can look at if they choose to do so, ha!), all further attempts to raise the issue with eBay and Paypal have been met by automated stonewalling.
TL;DR if you get screwed via eBay and/or Paypal and the seller even admits to selling fake goods (despite eBay policy, ha again!). Best case scenario you're out return postage. Otherwise you get nothing.
It's ebay, never assume the item is genuine unless it is clearly described as being genuine. Return shipping is almost always at the buyer's expense. Even when purchasing from a b&m store, returning it is at the buyer's expense(time/petrol).