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Buyer requests refund for item delayed in transit | Opens case in both eBay and PayPal

Okay so I’m a new seller and this situation is so hectic and confusing that I thought it’d be best to ask for help from you guys.

I sold a rather expensive item (insured with signature confirmation) on 11/22/2020 and shipped out the next morning — well within my stated handling time on the listing. Everything seemed fine until we got to the item’s estimated delivery date (11/28/2020) and the only scans were that it departed from my local USPS office. The tracking then updates to say that the item is delayed in transit and it’s still on its way to the next facility.

The buyer messaged on 11/28/2020 asking where their package was and I tried to explain to them that due to COVID and the holiday season USPS was under great strain and there was nothing I could do to expedite delays. I offered to contact USPS myself and try to figure it out and that seemed calm their nerves. USPS essentially told me what I figured was the cause of the delay with workers not showing up to work and there being more packages in the system than there were employees to handle them which I then explained to the buyer. I've also filed missing package claims which all result in them saying there's only been the initial departing scan and have relayed this info to the buyer as well.

Fast forward to yesterday where the buyer opens an IDNA case on eBay even though the item’s tracking still says delayed in transit. I tried to reiterate what USPS told me and explained that I would be out both my money and the product if I were to issue a refund and suddenly the package showed up at their address so I needed confirmation that the item was lost. They seemed to understand where I was coming from, but I woke up this morning and now see that the buyer has filed a case in PayPal with their institution reporting that they haven’t received the items.

I’m feeling very overwhelmed by both the eBay and PayPal cases and am not sure exactly how to navigate these two. I'm more than happy to give a refund, it’s just that I really don’t want to be in a position where I lose both my money and the item. Any help is appreciated. 

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