Both ethically and legally, it is the seller's responsibility to deliver goods to the buyer. When the seller mails the item, the seller's responsibility does not end. The seller is responsible for what happens during shipment.

However, the seller can stipulate different terms and conditions and if the buyer agrees (or doesn't disagree), delivery can become the buyer's responsibility. For instance, the seller can stipulate that payment for postal insurance is the buyer's responsibility and that if the buyer does not want insurance then the seller is not responsible if the item is lost or damaged in shipment.

Even if the seller had shipped the item in a reasonably secure package, like a bubble envelope, and the item was lost or damaged in shipment, the seller is responsible for a refund or replacement. In this case the item was not sent with secure packaging. A plain envelope exposes the chip, which appears to be a SILVER DOLLAR, to mail handlers. You have to assume that mail handlers will remove anything of value from the mail. So the seller is responsible.

But if this was not a valuable item, take this situation as a cheap lesson learned. You should be absolutely clear about responsibility for shipment prior to making a deal. Even small deals. I almost always pay for shipping when I am sell something. I package the items so that what is inside the envelope cannot be easily detected. I take out insurance on the package if I feel I cannot afford to have the shipment lost, for me that is usually for items over $50 or so.