PayPal will probably take the money from the seller and give it to the buyer which I don't think it is fair, unless the seller did not offer insurance. If insurance is offered the onus is on the buyer.
Well, I say that if it arrived damaged then it wasn't packaged properly. Unless something very major happened to it in transit. Still, if I was the seller I would take the blame for not packaging it better.
I only ship USPS as well and have had only one problem out of 2665 sales. The customer said it looked like it had been run over by a truck, even had tread marks on it! My customer's insurance should cover that, not me.
Despite what everyone puts in their auction copy, the onus is ultimately on the seller to get the package safely to the customer. Your responsibility doesn't end until it's in their hands.
Think about it this way - if you bought an expensive digital camera from Amazon.com, and the thing never arrives, would you just accept it and move on, or would you contact Amazon and ask them what they're going to do about it. I'd expect to get my money back... or to get shipped a replacement camera, at least.
Sellers may not like it, but that's just the way it is. If buyer's purchase insurance, I consider that a bonus - but the bottom line is, if I'm at all uneasy about shipping an expensive item, I insure it myself, even if the buyer does not.
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