Flawed? Not sure about that. I don't really know what else they can do to prevent such a thing. Have any suggestions? Send them to paypal, but I doubt your the only one who has this problem. I remember when I sold both of my paintball guns on ebay to some guy in Indiana. He filed a claim the day following after he paid, stating that he had not received it. Within that time, I had used the money to pay other listings, fees, and other items, which equated to the exact amount I received from the items I sold. Paypal received the claim, withdrew the money for the transaction, which gave me a negative balance, which in turn let paypal fine for that negative balance. I was FURIOUS!! I could not get into contact with the buyer for the life of me! I thought I was going to get scammed or something because I also had my bank account linked with paypal, and there was no way in He** I was going to let them get both my money and my paintball guns. Luckily, I always use signiture confirmation and tracking from USPS. I never state this my listings though

I gave it to paypal, and tadaaaaa...the buyer mysteriously claimed that he accidentally hit the wrong button on paypal! I've done claims on paypal, you don't accidentally go through numerous screens without knowing. They even reversed the fees.
Paypal can have it's scam artists hiding within, but unless you are doing a hand to hand transaction, I firmly believe it's the safest way to complete a transaction...at least for the general public.