Always send your items by a method that provides proof that the parcel has been received, rather than just proof of posting.
If you can give PayPal a tracking number they will not be so quick to refund. If you can't give a tracking number then PayPal will usually refund the buyer immedicately.
Don't forget that you can claim compensation from the post office if your item goes missing in the post, up to £39 with standard first or second class post.
The recorded signed for costs and extra 75p.
http://www.postoffice...&intcampaignid=PI0184