Do I have to give a refund to ebay buyer?

I'm in a big situation. This lady bought an iPhone from me and I shipped it off in an envelope. I even added a tracking number so she can see it when it would arrive. Problem is, she said she received it, but there was nothing inside the envelope. Do I have to give her a refund or am I not at fault? On the receipt, it shows that the weight of the envelope had something in there. Is that enough evidence, or am I forced to lose out on money?

Follow the process on line

This is a tough call. As a seller you fulfilled your responsibility by sending it tracked mail ie you can prove you sent it and prove she received it. I would wonder why she didn't refuse delivery but maybe it wasn't obvious that the contents were missing. I'm a buyer and I've just had an "empty" envelope arrive. I asked for and got a refund from the seller because I had asked for and paid for tracked shipping and insurance ($40) but the seller sent it $6 economy mail, no insurance. Maybe you should let Paypal decide this one ie let her raise a dispute, you provide proof of shipping and see whose side Paypal takes. You have a 50/50 chance. Sadly this time of year all the thieves are out and about knowing that parcels could contain something interesting and if you kindly wrote "iPhone" in the package description you alerted them to the wonderful opportunity. In future, make sure you don't write obvious details to attract thieves attention and get the buyer to pay for insurance.