My dad sold an item on ebay and the guy claims to have paid, ebay says the sale is complete and money has been sent. My dads paypal account has received no money and no trace of his payment at all is present. As far as the paypal goes, no money was sent. My dad uses ebay to sell a few items a week and has had no issues like this before now.

Anyone experienced this before? Did his payment simply bounce?

The only way to know if he has been paid, is to log in to his Paypal account (using the official web site) to see if it shows. Paypal do not send emails advising payment has been received, but some scammers do.

Look at Dad's account history and find the transaction and the credit for the payment. That will verify if it was completed or did not happen. If you cannot find the money in your Paypal account you did not get paid. Open a claim against the buyer for Unpaid Item before the buyer opens one against your Dad for item not received. There are many crooks out there and most of them buyers on Ebay. If Dad can use ETSY they are much better.

Your dad needs to CALL Paypal to find out what is happening if the payment is appearing in his history on Ebay. Don't trust any emails - they can be faked. Call and speak to Paypal to find out why the money isn't in his account before he sends anything

Yes it's a scam.

Your dad missed the fact that all he got was an email (fake and very slick--I've gotten one too).

If Paypal was holding the money, it would have been visible in his paypal account from the get go. It just woudn't say it was available to spend.