eBay will look for delivery - proof of postage isn't enough for them, so if the package never shows as delivered, they will refund the buyer (appeals if the item is subsequently delivered seem to have about a 50 / 50 success rate, just going by the stories told here on the boards).
The other thing is, just in case this makes a difference, because not all sellers have been aware of this, when an INR request is open, you have to add the tracking details to the request, even if they have already been uploaded to eBay and are visible on the original order details.
It's a really dumb rule, and there's no real justification for it, but eBay will automatically rule against a seller 100% of the time if they have not added the tracking details to the request before it is escalated (i.e. eBay "steps in and "helps""). JMHO, if the tracking number is already on the order details, it should automatically be attached to any request that's opened, but it seems like eBay want to catch a few unsuspecting sellers. (If this is what happened with your case, you may have success with an appeal - I know others have, but you may need to try more than once).
If the item hasn't been tracked as delivered yet, but it is in the future, send the buyer a message requesting either repayment or to send the item back. Give them a time limit to take either of these actions (and send a PayPal invoice for the amount).
If they don't return or repay the item, report them to ACORN. They are more likely to take further action on a case like this due to the value of the transaction, and the online form is very easy to fill out.
