Let me chime in as an online retailer that ships internationally for the past 16 years. USPS is a hit-and-miss company when it comes to this. PBK typically ships with a company that contracts with USPS once the package makes it to this side of the pond.
In our business, we ship a lot of packages with USPS. We use three services- First Class Int'l, Priority Int'l, and Priority Express Int'l. The latter is the most expensive, but has the most detailed tracking. First Class, which is used for small, lightweight items basically sucks, but it's very cheap if the package is less than 4lbs...but, the tracking is abysmal and sometimes shipments take up to 2 months to some places.
We have a page on our site that explains the pitfalls of international shipping, including info about customs, duties, etc., but we find that maybe 20% of our customers ever read that page, so they are surprised when they get charged duties. We do things to mitigate the fees they pay, but in some countries (Brazil for example), customers are charged at 60% duty on incoming goods if the shipment costs more than $50.
As far as lost packages...it sucks. In fact, right now, we have a customer in Spain that we shipped two packages to, on the same day. They received the smaller one, but not the larger one...three weeks ago. The larger one has nearly $500 worth of merchandise in it. USPS tracking indicates it was delivered on the same day as the first one, but the customer assures me he never got it.
So, as a retailer, what do I do? Is he lying to try to get a $500 refund? If I refund him, my small business is out $500. In many cases, the tracking is incomplete and my customer wants a refund, so I have a period of time (30 days for Priority Int'l) where if the tracking doesn't show delivery, I have to refund. Sometimes the package never turns up anywhere and is simply lost. Sometimes they end up getting it 2 months later. Sometimes it ends up back at my office several months later. That is, unfortunately, the nature of the beast when it comes to shipping internationally.
We file claims with the USPS, but if the package shows "delivered", they will never pay, and their claims process takes MONTHS!
Ultimately, as a retailer, we are obligated to "trust" the customer and refund or reship if they say they never got the shipment, and we are simply out of luck.
FWIW, when a customer disputes charges, 99 out of 100 times, the merchant gets screwed, and when tracking indicates a package has been delivered, the merchant has zero chance. eCommerce is a tough biz to be in. In your case, if tracking doesn't show delivery, it's pretty lame of them not to refund in my opinion.
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