When you're shipping a large amount of merchandise out on a regular basis, you're going to have to deal with the question of whether you offer your buyers insurance against damage or loss. Bottom line: Whether you offer insurance or not, you (the seller) are ultimately responsible for getting the product to the buyer. The lost-in-the-mail excuse doesn't cut the mustard, and having a delivery confirmation number doesn't guarantee anything either.

You may think that it's the buyer's responsibility to pay for insurance. If they don't, you say, it's their hard luck if the package doesn't arrive. This is far from the truth; a buyer who does not receive an item that she's paid for can legitimately file a fraud report against you. Buyers can also have the payment removed from your PayPal account if you have no physical proof that you've shipped the item, and you have no defense against this.