Depending on what he said in the dispute, mail a small package to his address and pay for a tracking number. Provide that to PayPal.
What you're basically suggesting is: scam PayPal because OP was dumb enough to sell Bitcoin using a reversible payment method.
Besides it wouldn't work anyway. It's an "unauthorized" claim and if OP ships a package AFTER the claim was filed it won't qualify for Seller Protection even if it otherwise would.
I'd say at $39 it's not a very expensive lesson to learn.
It's not scamming PayPal, it's protecting the seller who did nothing wrong. And that method has been proven to work. The dispute will be closed once the package has been marked shipped and then PayPal will do a small investigation on the tracking number, as long as it exists and is being sent to the correct address he has nothing to worry about.
PayPal Seller Protection does not apply to Digital Goods. If you're shipping a dummy package to mask a digital transaction that's a violation of PayPal terms. And no, shipping a package after the dispute has been already opened is also not covered under Seller Protection, unless you get a completely clueless agent and the scammer doesn't appeal.
Basically there is no sure way to get paypal to settle the dispute in your favor, but there are steps that you can take to give yourself a better chance.
The Paypal dispute team is just a group of human-beings who work off of their own scrutiny and methods. Granted they have some reservations and obligations set-forth by Paypal, but ultimately Paypal trusts their dispute team and doesn't ever question their finalized decision.
You're better off avoiding Paypal all together, but I will say that it's a sad day when scammers go unpunished because "the seller should have known better".
PayPal does question their dispute teams. There is an appeal process. There is not much wiggle room here as the transaction is not covered under Seller Protection so the scammer is unlikely to face much scrutiny. And the scammer can still file a CC chargeback if PayPal decides otherwise.
I agree it's sad/unfair/etc but that doesn't change the fact that the OP messed up.
