Speaking from the limited selling experiences I have had with Ebay & Paypal, I now only send my items by recorded, trackable delivery & fully insured only. I have had 2 items not delivered, lost! recently & unless you have trackable delivery, Paypal will automatically award a full refund to the buyer. One buyer was responsive & amicable, the other never responded to my emails & didn't even inform me that the item hadn't been delivered, they just opened a dispute for non-delivery with Paypal. Both Ebay & Paypal say try to sort it out by contacting etc. but how can you do this if the buyer doesn't respond to you. It seems to me that Paypal are only prepared to act for the buyer & don't even listen to the seller's side of things at all. Paypal are like a machine with no feelings, everything is black & white, even if you have a postal receipt with the country & date, that isn't enough, this machine has to have internet, trackable or it doesn't respond. I have also had fraudulent payments through Paypal whereby I lost the item I posted & the postage, because I didn't have trackable delivery. Paypals automated advise was go to the police even though they took the payment!
I think that sending goods by standard methods is very dangerous & this is a flaw in the Ebay auction selling. I could get goods by standard mail & report to Paypal they hadn't been delivered. I would then receive my full payment back & keep the goods, you the seller would be the only one to loose out.
You as a seller can't win, you have to think of your own protection & only use recorded, trackable deliveries & make sure all items are fully insured. Because if not & the item does go missing, if you don't give a full refund, paypal will refund the buyer fully & when you come to claim from the delivery co. you won't get all that you have lost back. Paypal are a quick & easy way to get paid for your goods, but always read the SELLER PROTECTION info, otherwise the buyer, genuine or not will win.