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And I couldn't cancel the e-cheque but apparently she would have been able to.
As stated, retailers don't receive the funds for about a week, like a regular cheque. I have no idea why - faster payments and transfers from bank accounts are instantaneous these days.
Paypal in their wisdom occasionally force e-cheques on unwitting customers - e.g. if you don't have enough in your Paypal balance or if your linked debit card has expired.
They don't tell the customer beforehand and as also stated above the sender cannot cancel an e-cheque.
The recipient can cancel it, however Paypal are (still) in the process of moving the site over to a new lickity-split system. Not all functions currently work on the new pages, so if the recipient has one of the new pages for the payment info screen the link to cancel/refund is missing for e-cheques. (There seems to be no rhyme or reason why or when you get this new screen instead of the old one)
In this scenario you have to go to the bottom of the screen and select the link to use the "classic" page, and the link is there.
To top it all off, once the recipient has cancelled the e-cheque the sender doesn't get the money back immediately - the funds still take about a week to clear and instead of going to the recipient they go into the sender's Paypal balance.
All in all a right pain the backside.