Buyer claims item not received and as it was posted as a large letter there is no tracking.

Buyer claims item not received .  It was sent as a large letter so there is no tracking.  Was sent well over a week ago and from Melbourne to a suburb in Melbourne.  Just want to know if I should just refund in full (i.e. with postage) or wait until a Paypal claim is made.  Do I get any fees refunded from Ebay and Paypal if the claim goes through PPal.

Thanks for any helpful advice.

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