PP now limits the gifts at $500 - you need to do multiple transactions for high priced items.
Gifting is a good way to avoid fees - ONLY if there is a bunch of feedback and you have talked to the person. This doesn't guarantee anything, but much higher probability of successful transaction. Not such a big deal on low priced items, but on some really expensive items this can add up to $100's of dollars in fees.
Glad the OP got his money back, but PP fees are getting silly.