I don't think they can do this and win a chargeback under the dc seller protection. I remember reading how etsy protects sellers who use dc and if a case is open against you, as would happen if the buyer claims they didn't receive the item or another reason, that etsy protects you if you can show you shipped the item. Otherwise, anyone could just make a purchase and not pay for it. I think etsy would be the one to eat the chargeback since they told you it was okay to ship it. They would have to deal with the credit card company. I think that's what seller protection is all about? If they were to claim dissatisfaction, they would have to return the item before they were entitled to any kind of a refund. I think they would also be responsible for paying the return shipping charges, legally anyway.