PayPal dispute, confused, help please!

[Justonedayatatime11]

I sold a handbag for £375, sent Royal Mail special delivery which covers up to £500. The buyer paid through PayPal, Royal Mail have lost the parcel . I've raised a claim with Royal Mail, but surely something doesn't add up, even IF Royal Mail refund me, I'm still £375 out of pocket and don't have the bag either! Is this wrong or am I just going to have to suck it up?

But you have the buyers money so they get refunded plus you get money from Royal Mail. You arent out of pocket

If they refund then you aren't out of pocket

So the buyer paid you £375 which can be returned to them as they have no bag.
You get £375 from Royal Mail to cover the bag and that's for you, not the buyer

You are not out of pocket unless you cannot access the funds from the buyer as they have not received the item. Is that the issue?

Even so you will still be refunded from Royal Mail and I assume PayPal will refund the buyer.

Oh dear. I am clearly being exceptionally thick! Apologies!

@Justonedayatatime11

Oh dear. I am clearly being exceptionally thick! Apologies!

Ahh, don't worry about it OP, if it's any consolation I seem to spend my life getting lost in life's conundrums like yours.