No matter how you use your credit card (direct, PayPal, etc.), you're covered. I'm a merchant, and believe me, the credit card company sucks the money out of the merchant's account (chargeback) the moment a complaint is filed. Then it's the merchant's responsibility to prove the sale is valid and have the chargeback reversed. Merchant must show proof of delivery, signature from an in-person sale, etc. to get the money back. As I tell all my customers who are new to online buying, "Use your card and you're 100% covered".
That said, your seller only guarantees $200 by PayPal and only offers "merchandise credit" not a refund, so you might want to do some more checking. Also, a very small number of transactions/feedback for 3 years as a user. Has this person sold this type of item in the recent past? Check the feedback and contact previous customers and see if the seller is legit.