Tracking shows as delivered, but customer wants a replacement because they can’t find it… what shall I say ?

That’s it,

Long story short : First they just reported an issue saying order hasn’t arrive - replace, I said hi- double check the post box, check with your neighbours and housemates, they said - still nothing, I said I’m sorry I won’t even be able to claim insurance from delivery company for lost order… and they then said that they had some mail theft in their building.

I don’t know if they are being honest or they just want another one for free… either way I’m not sure what to do? I don’t want to send them a free replacement, like theft in their building isn’t a problem of a small business owner you bought from ?

What shall I say to her?

UPDATE: they opened a ticket with Etsy and got refunded and no expense to me! So it’s a win win ! Yay!