Yes, Paypal only provides buyer protection IF you pay via "Purchase." When you pay via Friends and Family you're essentially telling Paypal you don't need any buyer protection, so they won't insure it (you are allowed to save on costs because they don't have to pay to insure it and aren't potentially out any money).
If you really feel like being generous and covering a seller's Paypal fees, you can get an approximate guide by going to a Paypal calculator like this one:
http://www.rememberingrolbe.com/paypal.htm
For example, if I was to send a seller $40, the seller would actually receive $38.54. If I wanted the seller to receive $40 exactly, I would send $41.50.
To me, as a seller I don't think $1.46 is such a big deal to lose when receiving money, and as a buyer $1.50 isn't much to send to keep that Paypal protection in place.





