Yes, that is what you need to do as long as you shipped on time with a physical scan no later than the ship by date is to have the buyer open an A-Z claim. It should certainly be covered since it is definitely a problem with delivery. You can use this template to send to your buyer:

You may be eligible to request a refund under the A-to-z Guarantee if you have not received your package and three days have passed since the maximum estimated delivery date or the tracking shows a delivery confirmation, whichever is sooner. Note: Amazon also requires you to wait 48 hours after contacting the seller before you are eligible to request a refund.

Requesting an A-to-z Guarantee Refund

To request a refund on an eligible order using a LAPTOP or DESKTOP device:

1. Go to Your Orders.

2. Locate your order in the list and click Problem with order.

3. Select “Package didn’t arrive” from the list.

4. Select Request refund.

5. Enter your comments in the text box.

6. Select Submit

To request a refund on an eligible order using a MOBILE device or CELL PHONE:

1. Call 888-280-4331 or use Amazon’s mobile app to connect to Customer Support.

2. Report that you “did not receive” your order.

3. Request a refund.

Note: Refund requests can take up to one week to investigate. Amazon will notify you of their decision via the email address associated with your account. To view the status of your request, locate your order in the list on the Your Orders page and select Problem with order.

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In the unlikely event that Amazon doesn't fund it and count it against your ODR, use the following appeal template (modify to fit your exact situation):

THIS CLAIM MEETS ALL REQUIREMENTS FOR AMAZON FUNDING:

This is an INR claim which meets Amazon’s policies for paying the customer refund. The refund was deducted from my account in error. Please reverse the refund of $XX.XX taken from my account and remove the defect from my metrics.

HISTORY:

Purchased through Amazon Buy Shipping under USPS tracking number (XXXXXXXXXXXXXXXXXXXXXX).

Customer purchased product on XXXXXXXXXXXXXXXXXX.

We shipped product on XXXXXXXXXXXXXX.

Ship by date for order was XXXXXXXXXXXXXXX.

USPS indicates product is still in transit as of the end of EDD window.

AMAZON INR POLICY STATES:

A-to-z Guarantee claims: If you purchase Amazon's Buy Shipping and ship on time, you are protected against claims where a customer reports problems with delivery. Amazon will cover the cost of these claims and they will not affect your Order Defect Rate.

Link: https://sellercentral.amazon.com/gp/help/G200202220

CONCLUSION:

USPS tracking clearly states package was in transit on the date the INR claim was made.

Item was shipped on time with a physical scan by the ship by date.

Amazon incorrectly refunded from my account. I followed Amazon’s INR Policy and expect Amazon to do the same.

Please reimburse my account the amount of $XX.XX.