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A "responsible" seller would refund your money and file claim with ups.
With UPS a value has to be assigned to package.
If the seller balks at a refund use whatever mechanism you have to dispute charge. It is not your responsibility to figure out what happened.
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And at the same time, it's not the seller's responsibility to figure out what happened to a package he sent to the correct address and got delivered there as promised.
So what's there to dispute? Sure the seller is responsible for sending him the goods as agreed upon, but once the package is with the shipper it's basically out of the seller's hands. He has done all he can (provided he sent it to the right address) at this point. What UPS decides to do with the package is solely in UPS's hands.
Yes the buyer has a case here that he hasn't "received" the item yet, but the same goes for the seller...he has proof that he shipped the item and that the item was "delivered" at the correct address. What happens to the item from that point is in no means his responsibilty.
What would prevent the buyer from signing the UPS box as a random name, keep the item then claim that he never received the item?