There is a way to stop these scammers!!

There have been many instances of the "ITEM NOT RECEIVED" scam being committed against countless eBay sellers.  If you are not familiar with the scam, please search for eBay guides explaining it more fully, as we will just summarize the scam here.  (There is an eBay guide with a full explanation of the scam which was written by msrs_online.) 

Basically, the scam is committed by a buyer who buys a small item listed with USPS First Class Mail as the method of shipping.  A couple of weeks after they receive the item, they send the seller an email saying they have not received it.  They then file a claim with PayPal, and usually, they end up getting their money back, PLUS they have the item.  I have read other guides which suggest that the best way to combat this is to either insure the item (at a cost of $1.65) or to purchase Delivery Confirmation (at a cost of $.75 or higher) when shipping by First Class Mail.  While both of these methods are helpful, NEITHER one will actually prevent the scam - at least not by themselves or together.  The BEST insurance for sellers against the INR scammer is this:

Always buy and print your postage labels online through PayPal or USPS!

When you purchase postage for shipping through PayPal, you are automatically charged for Delivery Confirmation service.  But that is not what will protect you.  IT IS THE PRINTED POSTAGE LABEL THAT PROTECTS YOU!! 

When you print a postage label through PayPal or through the USPS, it is AUTOMATICALLY ASSIGNED A UNIQUE NUMBER.  Additionally, PayPal AUTOMATICALLY charges you for ELECTRONIC DELIVERY CONFIRMATION - A SERVICE WHICH THE USPS DOES NOT ALWAYS PROVIDE - EVEN THOUGH YOU HAVE PAID FOR THE EXTRA SERVICE!!  THE USPS SITE OFFERS DELIVERY CONFIRMATION AS AN ADDITIONAL SERVICE FOR AN ADDITIONAL FEE.  ALWAYS PURCHASE IT FOR FIRST CLASS MAILING LABELS!!  IT WILL ASSIST YOU IF A BUYER ATTEMPTS TO FILE AN "ITEM NOT RECEIVED" CLAIM.

Many smaller local Post Offices do NOT scan items requiring Delivery Confirmation into the system when they are received by them for shipping or when they are delivered by them.  Often, attempts to confirm delivery of the package on usps.com will return a notice stating:

"The U.S. Postal Service was electronically notified by the shipper on date to expect your package for mailing. This does not indicate receipt by the USPS or the actual mailing date. Delivery status information will be provided if / when available. Information, if available, is updated every evening. Please check again later."

This glitch on the part of the USPS allows the "Item Not Received" scammer a great deal of leverage against an honest seller.  This loophole could be closed easily by USPS simply scanning the Delivery Confirmation label or the postage label throughout the transit of the package.  But they will tell you they are not required to do so, unless the package is Express Mail, which requires tracking information to be posted regularly during transit.  While USPS and PayPal are quick to tell you that the Postage Label or Delivery Confirmation number is not a tracking number, and they do NOT provide tracking information for anything but Express Mail, this is not entirely truthful on their parts. 

Because the printed postage label was assigned a unique number when you purchased it online, that unique number was accompanied by a barcode, also printed on the label.  This barcode IS scanned by high speed scanner at GENERAL MAIL FACILITIES ON BOTH ENDS OF THE PACKAGE'S TRANSIT.  AND IT IS AUTOMATICALLY LOGGED EACH TIME IT PASSES THROUGH A "GMF", thus leaving record of its travel. 

What to do when usps.com does not show online delivery confirmation information for a package

You paid for the service - you should expect the USPS to deliver the service in full!!  However, when you call your local postmaster and tell them there is no delivery confirmation information available for a package, they will first tell you to allow two weeks for delivery to be made.  If that time has passed, they will attempt to confirm delivery using the same "Track & Confirm" service offered on the USPS.com website.  They will usually get the same information that you receive -

"The U.S. Postal Service was electronically notified by the shipper on date to expect your package for mailing. This does not indicate receipt by the USPS or the actual mailing date. Delivery status information will be provided if / when available. Information, if available, is updated every evening. Please check again later."

They will likely first claim they have not yet received the package from you.  Tell them exactly when and where your package was received, and by whom, if you know.  This will get the ball rolling a little quicker if you have this information. 

If you do not live in a large city, chances are that your postmaster will have to contact the nearest General Mail Facility (GMF).  The GMF will search their logs for your package's unique identifying number which will tell them that they processed your package, the date and time it was processed, and the destination GMF for the package.  The destination GMF is the General Mail Facility nearest to the package's final destination.  ASK your postmaster to provide you with WRITTEN CONFIRMATION OF THIS INFORMATION!!  They are always happy to do so.  Likely, they will also provide you with a phone number at the destination GMF that you can call to request the same information for the package logged as it passed through that facility.  Again, ask them to provide the information to you in writing.  THIS INFORMATION IS AVAILABLE FOR ALL POSTAGE LABELS WHICH ARE PRINTED ONLINE.  HOWEVER, THE USPS WILL ONLY GET THIS INFORMATION FOR YOU IF YOU INSIST THAT THEY DO SO.  IN ONE CASE, I HAD TO QUESTION THE INTEGRITY OF EMPLOYEES AT MY LOCAL POST OFFICE BEFORE THEY WOULD REQUEST LOGGING INFORMATION FROM THE GMF, BUT THEY GOT THE INFORMATION FOR ME!! 

Once you have this information in hand, it is sufficient evidence to combat a fraudulent "Item Not Received" claim filed by a buyer (with PayPal).  The Uniform Commerce Code clearly states the seller's obligation to the buyer ends when the seller delivers the merchandise to any shipper for shipping.  You now have proof the shipper had the package (by the logged information) and if the buyer did not receive it, they must file a claim with the shipper.  It is not your obligation to do so.  PayPal must resolve the claim in your favor.