Some people who do business online “under the table” use PayPal to get paid but don’t hook their PayPal up to a bank account so that they’re not on the radar so to speak. If your PayPal is not hooked up to an account, then the only way to use the money in there is through websites which accept PayPal (like Target). Returning the items and then getting cash for it seems weird to me in this way. I’m sure it’s just a small minority who even do what I mentioned above but it still struck me as weird the first time I gave cash back to someone for a PayPal purchase. I’m sure it’s not really a big deal though!