@JulesCT
My advice is do what I did. Inform them that the package is declared lost as per your communication with the delivery company. Tell them that they will be compensated via the usual channels and you want a replacement item shipped immediately. Inform them that if you file a claim with PayPal, providing them with the communications from the delivery company saying that the package is lost, you will be refunded straight away. But tell them that you don't want to do that because you use them regularly and have always been happy with the service you have received and you therefore want to give them every opportunity to rectify the situation without involving PayPal. However, they must rectify the situation now as your contract is with the vendor and not the shipper. They get the compensation so what happens between the vendor and the shipper is none of your business.