Item hasn't arrived 2nd class no tracking how to handle as seller?

[reeldea1s]

I post all items 2nd class letter sometimes large letter which doesn't have tracking sometimes the large letter shows as delivered sometimes not. As a seller I am never sure how to respond to people wanting a refund because they haven't received anything but I make small margins already and can't really afford to chuck out refunds like it's nothing. How should I handle these? Should I wait the 3 days after a dispute is opened to let ebay step in? Should I just send a refund and wish I could afford tracking?

Additional Context:
Right now buyer is asking after 3 weeks and complained after 2 working days that item hasn't arrived despite 3-4 working day timeframe being given
I don't have that much stock of each items but tend to spread across maybe 10-15 listings so I can't really just send out another preferably

[john1297576]

When a not received case is opened, firstly ebay will freeze money held, then you have 3 days in which to refund.

Failure to refund and buyer can escalate to ebay, you get a defect and no refund of selling fee.

Sellers are rated, not on feedback but by defects, too many and account gets restricted possibly suspended. 

“Defects” Business sellers are dealt with differently to private sellers but ebay expect no more than 2 per 100 sales, 2%, so Business Sellers would probably also expect no more than 2%, so allowing ebay to deal with not delivered cases, would quickly see you with problems.

Suggest you read this https://www.ebay.co.uk/help/selling/selling/seller-performance-overview?id=4080&st=3&pos=2&query=Sel...

[reeldea1s]

Thanks for replying, I would really like to find out if it is down to royal mail as the courier to figure out what is happening with the product or even for ebay to do so but as of yet the customer hasn't opened a case and has just communicated via ebay messaging so I am not worried about ebay giving me a defect