This doesn't really answer your query but she wasn't supposed to send payment as a gift, nor was the seller supposed to ask for that. It's against paypal rules and apparently they are clamping down on it. Here's part of an email sent by paypal to a regular seller....
"........................We're not sure if you are aware of this, but we noticed that some of
your customers are sending you personal payments for purchases.
Unfortunately, this violates our rules, and we need your help correcting
this. Please don't ask or allow your customers to use personal payments
to pay for their purchases.
If we continue to see such activity after March 9, 2010, we may have to
disable your ability to receive personal payments, and then you will pay
fees for all money received through PayPal.......... "
I'm amazed that a lot more regular sellers haven't been warned, particularly ones like your sister has encountered that refuse to honour the deals if they haven't fully avoided all fees. Like a lot of people I have gifted payments - but when it suits me on a personal level. I'd rather the price took the fees into account.
- Kev