Paypal has a feature that allows you to gift money so the recipient is not charged a fee. It is set up for sending gifts not for buying things. There is no protection when you send money as a gift. Sellers request you send money as a gift so they won't be charged the user fee. Personally i think the seller should just eat the cost of using paypal but a seller can do whatever they want.
When using paypal I always pay normally that way I have protection from paypal is something goes wrong in the transaction. Also that is what the rules are and i would prefer not to lie. Sometimes this means the seller will make you pay the 3% fee they will be charged.
Like stated above....and here is how I look at it.
Say you buy an item for $100 and the seller flakes on you.
You can either pay the extra $3 at first and get your $100 back promptly should you need to.
Or you can not pay the extra $3 and be out the $100 in the end.
Its an easy choice for me, unless I really know the guy.
Yeah, if you "know" the person, gift is fine. If the seller asks for gift and you're not comfy cozy, just tack it on. Just don't mention gun shit. And you can't pay for firearms with it.