Notice left and item never picked up at the post office, what happens now?

I sold an iPhone through eBay and they left a notice so the person could go pick it up at the post office, its been 17 days and they never went to pick it up. What will happen now? The item still has not been received back and the tracking info is still stuck at "notice left" the idiot who bought it from me says they told him at the post office it's not there and it's better to open a claim because the item was shipped with insurance. What will happen now? Will I receive the item back? It was sent through "medium priority mail flat rate box with insurance and signature confirmation" please help me! The item was for $350! :/

Call the post office. If they don't have a signature, then it's not delivered. They should be able to track it and tell you what's going on. If they lost it, then they'll probably make you wait a couple of weeks while they try to find it, and if they can't, then you get the insurance money.