Here is how you fix your shipping defects that you may have had with lettermail. Change your shipping policy so your shipping service is Economy Shipping, and not Lettermail. Economy gives a delivery window that is about 30 days long, which helps account for the occasional lettermail delay. eBay's lettermail timeframe is unrealistic. You can also increase your handling time to 3 days. Economy Shipping is a generic term so it isn't as if you are falsely advertising your shipping service. I've noticed, almost every eBay seller who uses lettermail does this because eBay goes by Canada Post's lettermail standard, which is not guaranteed, and as a result is unrealistic.
Second, send the buyer a message when the item ships. I understand eBay sends a notification when you click off the shipped box, but especially right now people are more patient if they know that their item absolutely did get handed off to Canada Post. You can write up a stock message to do this. This is a good opportunity to open the line of communication with buyers in case there is an issue, market your store for repeat business, and assure them that their item actually was shipped.
Lastly, if you have 1300 items, and you aren't selling anything, it means there are things you can learn and improve on. This isn't a bad thing, it's a great opportunity to experiment and see what works and what doesn't work for you.
The customers are there. and I think your biggest problem is that requiring tracked shipping prices them out from buying some of your lowest cost items. So I would reconsider using tracked shipping. You are going to lose packages to INR claims. That's part of the cost of doing business with lower profit items in Canada on eBay. What you need to do is look at it purely economically. It is no different than looking at something like the cost of bubble mailers, or whether the percentage of fees eBay charges you makes selling viable.
If you lose 10 bucks every time someone makes an INR claim, is the increased volume of sales via being able to ship for 3 dollars instead of 13 worth it? You said you're not really moving any items right now. Let's say by going back to lettermail, you can sell an extra 20 items a month, but you'll lose 1 a month to an INR. Would the profit from those 19 additional orders that were successfully delivered make the cost of the 1 INR worth it? In that scenario, the answer will almost certainly be yes. I don't know what your long term sales were like with lettermail, or your ratio of losses. So you'd have to work the numbers and figure out if it is worth going back to untracked shipping. My hunch would be that it is, but I know every category has different rates of INR losses.
It is also possible that you were getting a higher rate of INRs because of using the lettermail shipping service designation on eBay that gives you a shorter window for shipping (as discussed in the first paragraph). While I don't doubt that some of the INRs were people genuinely scamming you, I'm equally sure that some were people who don't understand that cross country lettermail can occasionally take 2-4 weeks, pre-emptively opened a claim thinking they were doing their due diligence, and later received the item after you had to refund them. So some of the INRs may have been caused by too short of a delivery window. While rare, some worst case lettermail scenarios can take 25-40 days.
A productive way to revamp your store might be to go through some of your higher end items and search eBay's sold listings to see if your prices are still competitive with what they are selling at compared to when you first listed the items. Prices for out of print items fluctuate all the time, and buyers aren't always willing to equalize against that through the best offer feature. So it is better to re-price things periodically. Keep in mind, this doesn't always mean dropping the price of the item, you might find an item that you've accidentally underpriced. But in general, if your items aren't selling, they probably aren't priced competitively enough. In certain categories, there might be creative ways to create value for your target customers, but in a lot of cases your way to create value on eBay will be to have the best looking listing presentation wise (Good photos, clear title, "free" shipping, being easy to find via good 'Best Match' placement) and to have a price that is competitive with others.
For items that ship "parcel" and not lettermail due to size, if your prices are in line with what they are actually selling for. I would also consider getting rid of your shipping charge for US and Canada, and baking the shipping price into the listing. For items that can ship Tracked Packet to the USA (which looks to be a lot of what you sell), the price is in a similar ballpark to what it costs to ship an item regular parcel within Canada. So calculated shipping doesn't have much benefit, unless it is a really heavy item. If you budget an average of $20 an item, and add that to the BIN price, it will look a lot more attractive to buyers. So instead of selling something for 80 BIN + 20 shipping, you'd sell it for 100 w/ "free" shipping. Having free shipping simplifies things. When someone searches for an item on eBay, they are accosted with sometimes dozens of options. So it goes back to having the best presentation and making your item easy for someone to want to click on and know what they are getting into.
The only benefit to charging for shipping would be if you have a large customer base, and they are likely to be interested in buying multiple items at once to benefit from combined shipping and lower their overall cost per item. Some sports card sellers who have very large inventories can pull this off, because there is a lot of cross appeal with player/team collectors. I don't think this would be as likely for the type of items you sell, and the number your inventory is at, but I could be wrong - you'd be the best person to answer that question based on your prior sales.
You look to have some good items, and it sounds like you had some success in the past, so I'm sure with a bit of experimenting you can increase your sales. Best of luck!
