First, this is obviously a scam. Connect the dots and it isn't hard to see. So, you have two choices. Either end it immediately, by issuing a refund, which closes the case. This is the simplest and probably best course of action. Or you could try to teach the scumbag a lesson. Honestly, you are lucky you caught the "account freeze" before you shipped the card. Usually sellers have their cards stolen and the money refunded when this kind of scam occurs. So, since it's obvious that this was the intention of the buyer, I'd consider sending a bubble mailer with a decoy and then giving the shipping info to Paypal. You'll probably keep the guys money, and your card, and teach him a lesson. Worst case scenario, he wins the claim and gets the money back.