When the unfortunate event,either lost or delayed, happens, refund the money back to customer, then send email to paypal ask for the seller's protection. Most likely paypal will sent inquiry to post office. If the package is indeed lost, you will get the money back from paypal. if just delayed, after the customer got the package, negotiate with him to get the money back.
Before you are sure it is lost, don't promise the customer to ship them another one.
Hope that helps.