Giving the buyer a good experience of buying from you is important, as any company with the wisdom to run a loyalty program will tell you. THAT's why you send a replacement - you want repeat sales and sending a replacement will show the buyer you are a seller who can be trusted - especially if they know you don't have to.

Sure Australia Post may eventually cough up if the buyer puts in a claim, but it takes months and a lot of effort. So it's better to resolve it yourself.

If you need to, add a small cost to each sale to compensate for the occasional mishap. It is fairly rare that things are damaged, after all - never happened to me - more commonly, they are lost. But PayPal covers that if you use tracking.