If a buyer refuses the registered post option&the item goes missing, is the seller liable to refund?

If a buyer refuses the registered post option, does the seller have to refund the buyer when the item gets lost in the post? 

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Yes, the registered or tracked post is to protect you, not the buyer, they have paypal to protect them. If you choose to post by a method that doesnt comply with paypal, then you have to take the risk of refunding for lost items.