Missing shipment

Seriously, that's on the seller. If the seller had insured the item for the stated value a signature would be required. If the seller had spent a couple of bucks on signature confirmation there would have been no issue. There's also a geo-tracking option on the new scanners the USPS uses for delivery that in concert with Google Earth will show where delivery was effected.

Paypal will back you up. If there's no signature, delivery cannot be proven. The seller took the course of saving a few bucks. That's not on you. Have the seller file a claim for the $50 that Priority automatically includes and ask for a full refund while he pursues his claim. I handle this type of stuff all the time. I'm a Postmaster.

Okay, you've established that you have a winning case. If the fellow you're dealing with is a stand up guy you won't need any of that. He'll just refund. If however, it's not that easy, watch your time limits. If your Paypal purchase was funded by a credit card you have a year to file. If however your Paypal purchase was funded by your Paypal balance, your time frame to file is much shorter. Stay in contact with Paypal and don't exceed your time limit because you could turn a winning case into a loss by taking too long. It's best to deal with the seller directly and give him a reasonable chance to do the right thing. Be careful though if any delay should compromise your time to file for recompense.