i think it's fine to say no to the gift option if you don't feel comfortable with it.
i know when i'm picking things up for people over seas, and i'm only asking them to pay the cost of the item and shipping, i will ask them to pay the paypal fee for it as well, otherwise i am literally paying for them to get the item. more of a cost with overseas items because of the currency difference.
if they don't agree to that, then i will charge more for the item to cover the fees. or not get it for them at all. (of course no money is exchanged) you can always offer something like this in this kinda case, but if i'm are making a profit on it. i except to pay the fees. don't like it, but expect it. that's why i try not to sell small amount of stuff cuz the fees make it totally not worth it.
hope that helps. thanks.
also, if i'm buying from someone and the cost is under 5$ with shipping i send it as a gift, cuz it doesn't charge me, and if i lose 5$ it can be chalked up to a life lesson.