It seems pretty weird, but I'd recommend you'd move off paypal. Paypal is designed for low risk businesses, you're selling something which is "cash-like" which automatically puts you into a high risk category. And Paypal fraud detection systems give you far less leeway if you're considered to be high-risk.
If you're doing a reasonably volume of sales I'd recommend just using a merchant account provider (probably your best bet is asking around local startups to see who they use). You'll pay a higher premium due to your risk factors, but you'll get better service.
