The rationale is that they provide a service when the transaction is processed (regardless if it is later reversed). I can somewhat tolerate eating the fee if I made a mistake and then had to refund someone. What bothers me is cases like I had today. I had a coin listed on eBay with a clear photo and an accurate description (including noting defects with the coin). A person buys it, pays, and then a few minutes later messages me that they want to cancel (claiming they bought the wrong item-side note: how do you buy the wrong coin that is a buy-it-now listing that has been up for several days now?). Of course I refund within a few minutes of seeing the message. For all this I get the privilege of paying money to PayPal. It's not a big amount, but it still stinks to lose money this way.