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If the seller is offering a replacement, ask for an immediate full refund of your payment including shipping.
Long story short, this is rapidly becoming a popular scam, especially with overseas sellers.
If the seller does not send a refund within 24 hours, open an Item Not Received dispute in the Resolution Centre. (Up there under Customer Support).
If the seller cannot prove DELIVERY, Paypal will refund you and go after the seller for their money.
KISS