Most of the ones I've read about come much sooner...are you neck-talking, or do you have something to cite?

personal experience

Ok then. My experience is we process hundreds of successful transactions per month, get about 1 complaint every other month, and 1 chargeback about every 3-4 months. They do impound fees on any dispute or chargeback, but I would hardly call it business crippling. Certainly less severe than our merchant account which has a higher chargeback fee than PayPal, and also PayPal doesn't charge for customer disputes. Also PayPal has ruled against every customer who filed a complaint about delivery once we showed proof of delivery (not a signature). Our merchant bank has screwed us every single time there is a chargeback over non-delivery, even when we fax them a copy of the recipient's signature.

In short, I can't wait to get the "delete merchant bank/switch all processing to PayPal" task to the top of my to do list.

PayPal has never required us to leave a reserve amount in our account. I believe that is due to our low complaint/chargeback rate.