I think that from a buyers point of view,  if they didnt receive the package its fair for them to leave negative feedback,  however they did realize they were getting a standard postage with no protection,  so they should know on those grounds they may not receive a refund.    It would seem like alot of us try to use standard postage letter rates when selling small unexpensive items,  its saves us and the buyer money which is what we want.  I guess it just comes down to your decision to send it out again or refund to avoid negative feedback or if you choose to save money and take the negative feedback.