If I'm not mistaken, you have to sign up for this before purchase. If the seller doesn't accept returns, it also can't be used.
If you already have a Paypal acct., you just have to activate the "return shipping on us." I have an order I'm waiting on, I just hit the activate button, and the option to request return ship became active on the Paypal order. That's as far as I've tested it. If my bag in transit turns out to be fake (I hope not, wanted it for a trip,) I'll be testing this further.