Yeah, I've been wondering that myself Jesse... Actually a lot of the "winning" bidders involved have been asking that. I just don't know.
I'd imagine that if the seller's contacted by a small handful of people personally, that he can just refund the money from Paypal, no problem. But I'd be willing to guess that if Paypal starts simultaneously receiving more than just a handful of complaints against a specific seller, that it'd be in their best interest, as well as of those who paid money, to freeze that seller's account immediately so he can't access the money and potentially withdraw it all and try and take off.
They've probably got some Complaint/Refund demand limits installed at Paypal that sound the alarms to freeze an account when necessary. Either way, I had asked the seller personally (prior to involving Paypal) for a refund several times, but to no avail. So I went with the Paypal route after that, and we'll see how that goes. I'd imagine if they've ever seen a slam dunk case of fraud where people are deserving of refunds, this would have to be it. Could 50 or so people all complaining about the same seller all by lying? I don't think so...

Someone over at 'Scum totaled the auctions that NeoToys is currently scamming folks on, and came up with a figure over $10,000.

Bastard.
And you know what? I honestly don't think the guy originally set out to rip anyone off. He was a seriously legitimate seller prior to this, and was trying to clear things up for a while when this whole fiasco started... My guess is just that these were all pre-order cases (which he
never stated) and he didn't get them in, or he did and has been super lazy this month for whatever reason, and hasn't sent hardly any of them out. But then he made up an excuse to buy him some time, which turned out to be a flat-out lie that a number of people caught him on, and then it just
quickly snowballed after that. When all of his customers found out he was lying, they all immediately assumed the worse and started complaining and demanding refunds, which I'd guess lead to him freaking out, and completely giving up on trying to rectify things. Kind of a riot/mob scene, and he never had a chance. If only he had just been honest with everyone, he might've saved his business.
Very bizarre...