I can't really say I'm surprised that he refused the package. Considering the way this has blown up, I'd have denied the package also, and when you got your knife back I'd be demanding the money. Paypal would side with me, and that would be that. All I'd need to do is contact Paypal directly and give them all communication where you've completely lost it, and they'd refund me pretty quickly. If you didn't have the money, your account would be frozen. Oh, and good luck just starting up a new one (they've got tools that track that stuff, it's a lot more involved than "I'd just use a new email address!"), and given that Paypal is still the absolute top dog fastest way to pay for stuff online, your level of inconvenience would go up pretty much immediately. And all because you didn't just send the guy his knives when paid for them however many weeks ago.