Before you list your item you should make yourself aware how and for how much your are going to send it. This should be the main factor in deciding how much to charge for postage or offer free postage.
If loss is too big In your case, you cal lie to the buyer that item was lost and make full refund, then get final value fee from ebay. you will only lose ebay insertion fee in this case
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If you want to save, do not use Paypal to print label. It only offers 1st class postage. Take your package to the post office and send it second class (not signed for). Keep receipt until buyer leaves feedback
The buyer paid YOU the postage amount. Now YOU pay for the postage.
To print a shipping label you either: (1) Have to have PayPal acct. that will pay for postage or (2) set up acct. with PO. Then you can print shipping label
sounds like you didn't charge them enough for the postage maybe
i sold something on ebay for £7 and had the buyer pay for postage (which it appears they have), but when i go to print the postage label it says i have to pay £3 too? is this normal? i didn't know about this :(