eBay/Royal Mail problem?

[Adam]

I sold an item on eBay for 35 pounds plus postage and the buyer is claiming he hasn't received the item. He escalated the case to customer support on eBay who then refunded him the money. Obviously that comes back to me. There's no proof that he hasn't received the item so he could of gotten away scot free with my money and my item. I have a receipt for proof of postage (first class) but it was not recorded delivery so there is no proof of delivery. I have been advised to claim a reimbursement with the Royal Mail (who I used to send the package), but after looking on their page it says that the max they refund is the postage and a maximum of £20.00. I paid £8.90 for the postage. So does that mean I am going to lose 7 pounds plus the money I paid to eBay for no reason?