I went through a very similar situation a few months ago. I’ll relate what happened as best I remember it; might prove helpful and/or reassuring. At the very least, it’s an entertaining story.
Some guy bought a card from me on eBay a loooong time ago, such that the window for him to open an eBay case had long since come and gone. However, the window to open a PAYPAL dispute is significantly longer… I think 180 days vs 30 days (which is total jank bullshit, but that’s another topic). So, several months after this guy bought his card, I get an e-mail from PayPal saying that a buyer has opened a dispute against me seeking a refund and that I have X days to respond. I’m confused as fuck, because I literally don’t recognize the guy’s username, the transaction amount, etc… Until I see that it’s from, like, five months ago. Of course I don’t recognize any of the details, because it’s been half a fucking year and I’ve conducted hundreds of transactions since.
I contemplated just refunding the guy because I didn’t want to deal with it and the sale amount was like $15 (which makes this whole thing even more ridiculous), but I decided to fight the case on principle because it annoyed me. The reason given in the claim was identical to your situation: “buyer did not recognize/authorize the transaction.” Now, I did not have tracking info, because (1) prior to the eBay standard envelope service, I sent low-value items PWE and (2) it was an ancient transaction and I would have tossed the tracking info anyway. This was a problem because PayPal (like eBay) will almost never side with the seller in a dispute if he or she cannot provide tracking info.
Nonetheless, I figured I still had some standing because the given reason in the dispute was NOT that the buyer didn’t receive the card… Said nothing to that effect one way or the other. I ended up calling PayPal’s customer service (an experience I do not recommend unless absolutely necessary). I went through multiple reps trying to explain that my inability to provide tracking info should have no bearing on the outcome of the case, because whether or not the buyer received the card was not the issue (per the buyer’s OWN given reason for the claim). They struggled to wrap their minds around this, but I eventually got somebody who understood the logic and said they wouldn’t automatically disqualify me from winning the dispute because I couldn’t supply tracking info. From there, I essentially argued that it wasn’t my problem/responsibility to refund the buyer because they “didn’t authorize the purchase.” There was an obvious paper trail indicating that the guy purchased the item, which I provided, and PayPal eventually decided the case in my favor. Lot of work for $15 but very gratifying. Fuck that guy.
If I can win a similar case without being able to provide tracking info, you should have no problem with this one. As you said, you have clear documentation that the guy intended to buy the card. Provide that documentation (screenshots of message logs, probably) along with the tracking info. The latter is, if anything, MORE important. If the guy is trying to scam you, he fucked up royally by claiming that he “did not recognize the transaction” as the reason for the dispute. If he hadn’t picked a reason that was demonstrably false, he could have easily pulled a bait-and-switch on the return, sent you a damaged copy, or pulled some other bullshit. But because he selected that as the initial reason, any other complaints he puts forth (claiming that the card was damaged, was the wrong card, didn’t show up, etc.) will be transparent bullshit because his first attempt didn’t work. Even PayPal should recognize that.
Given that he’s trying to do this kind of thing in the first place, I’d fight the case as hard as you can to try and avoid accepting a refund or return. Guy seems like a scumbag, and there’s a good chance you end up with an empty toploader in the mail if PayPal forces you into a return.
Best of luck. You should be able to come out on top here.