It should transpire that neither buyer or seller is out of pocket.

Seller proves they posted

Buyer proves not received as regsstered requires signature.

Buyer should be refunded by paypal from paypal (that's why paypal charge a commissiion on money recevied by sellers). Pretty sure they should have enough in their kitty to cover this one.

As a seller though, I think you have to inititate the investigation for non delivery with AP ? don't think the buyer can do that.