on 11-07-2014 09:20 AM
You can do either.
If you want to ensure you are covered by PayPal Seller Protection you need to have proof of postage which includes proof of lodgement - either a lodgement receipt from the PO or a scanning event on the online tracking.
If the item is posted in a red box and is lost prior to any scanning event then you have no proof of lodgement. You also have no insurance as Signature on Delivery no longer provides any insurance cover. Did you know that you can insure for loss or damage by selecting Extra Cover for $1.50 per $100 value without selecting Signature on Delivery (up to a max value of $300).
If the item is low value and easily refunded or replaced or you are not worried about Seller Protection then using the red box is fine. I do for some items.