Just write the code on a piece of paper and post it using recorded delivery. Don't tell your buyer you are doing this, send it in a brown envelope so it looks important and he will sign for it.
Then just enter the tracking number into paypal stating you have sent the item, its been delivered and Microsoft have told you that the code was redeemed the very same day that the buyer received the item and complained.
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Kelvin MacKenzie is a ****!
Justice for the 96! YNWA