One post that I came across mentioned specifying "funded payments', not CC.  Can anyone explain that, please?

Funded means you either have a balance on your PayPal account, or you use you checking account to find the transaction. If you use your credit card on PayPal to pay for the credits, the person will have to pay a fee to get the money. (I learned this from experience :(. PayPal should give you are warning about that when you initiate the transaction IMHO)

I learned this lesson the hard way too.  Someone at first wanted 10+ credits.  Then after several days decided they only wanted 1. So she transfered the money but did too little. So she put more in using her debit card for both and asked for another one. Well it cost me almost $1.00 to get the $5.5 she put into my paypal account.  Next time I offer to sell credits I'm making sure it's going to transferred from a checking account. Then you only pay the .50 if you remove the money and nothing if you use it as an ebay payment.

I need to correct this. She said she wanted 1 credit and though it was 2.50.  She pm'd me to varify the price after she transferred the $.  So then she said she'd take 2 and did the 2nd one.  But she did the first transfer for over the price of 1credit. Now she's mad because I only buddied her 1 credit for 3.75 (it cost me .60 to claim it). I denied the 2nd charge.  So I just buddied her another credit and asked her why she did 3.75 if she thought the credits were only 2.75. Ugh such a hassle. So basically I just sold 2 credits for 1.50 each.  Next time I'm going to specify a minimum # of credits purchased and that it be from checking account only.  No debit or credit card.

Thanks for the info, Mary and Melanie.  I would surely have done it wrong without knowing! 

Mary - maybe she gave you the extra in order to cover the fee? I've seen a lot of people do that too, ask for the fee too if people don't use funded.