Can someone refresh my memory on seller protection when a tracked parcel is lost in Australia Post network.

The parcel was sent mid November from metro Melbourne to country Victoria.  Tracking shows it was initially sent to Queensland (?) and arrived back at AP Sunshine on 22 November.  No further tracking events.  I have lodged a case with AP but no response to date.

The buyer is understandably loosing patience.  I would like to offer a refund if there is no further movement next week.  Is it best to advise the buyer to open a INR with eBay or Paypal (ie which will cover me via seller protection).  Standard tracking - no signature.

Thanks