AmEx is very sensitive to award abuse. Paypal as a result is extremely suspect when there is no regular transaction but a payment to someone. Generally Paypal will work with AmEx to keep abuse down behind the scenes but there have been cases where people got too close to the edge where they were paying family and relatives and keeping the rewards. In the end AmEx caught on since they run both the card and the network and wanted an explanation. As long as you do not abuse it you will be fine. AmEx sees everything though.
I read on these forums (forget where) but someone used their Amex card on PayPal to purchase furniture from a relative, Amex canceled their card. I personally don’t use Amex on PayPal at all
I've used Amex cards for tens (I'm afraid to look, but it may actually be hundreds) of thousands of dollars of eBay transactions with PayPal over the past 17 years with zero issues. As others have stated, if you are trying to circumvent cash advance procedures or doing fraud abuse, if caught you will very likely have your Amex accounts closed.
Don't send someone you know cash. Don't use the card for any merchant that could be linked to you or a relative. But the original question of using it for eBay purchases? Absolutely fine!
