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if the tracking shows delivered, then paypal will rule in favor of the seller. Please tell me you contacted the seller before opening a dispute
Seller Protection: For items not received where the transaction value is equal to or greater than US$250, proof of delivery with signature confirmation is required.
You didn't have it sent priority for something that cost over $250? Ouch. I feel badly for both you and your seller. That's a lot of money to be out.