Buyer claims item not received, tracking shows delivered...

Sold an item 6 weeks ago, buyer lodges INR with ebay after 3-4 weeks, I upload tracking info 2 weeks ago.. Australia post washes their hands of it today, claiming delivery, no offer of compensation... using extortion to demand $1.50 each transaction to ensure delivery... WHat now?? I had the option to send via letter, but opted for satchel with tracking to ensure bnwt item could be tracked..  Am I covered anywhere? Is it a waste of time using tracking without insurance? Am i simply to refund a possibly dishonest buyer and suck it up? I thought the whole idea of tracking was so paypal would cover the loss?

thanks in advance

Lizzy

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