I guess it all depends on the way you approach it - buyers and sellers alike will find different methods more appealing, but we all factor postage costs into stock purchase decisions,  (in other words, everyone has to ask themselves can I get enough money from a buyer for this that will cover all the required expenses and make a profit - same maths, different way of writing the equation between 'free' post and charging for it separately). 

Oddly 'free post' just does not work for the majority of my items. I tried it more than once, for several weeks at a time, and my 'free post' prices were on average 10% cheaper than my price + postage separately; and we're talking a nominal postage charge here ($2.00), yet for some reason no one would buy a necklace for $9.95 free post, but I sold around 50 when they were $8.95 + $2 P&H. Go figure. o_O

Also, the buyer receives the total of their original payment back if an INR dispute is found in their favour, so in terms of PayPal disputes, they are no better or worse off if a seller offers free post.