Signature confirmation should be proof enough for paypal. Delivery confirmation (online shipping) may not always be scanned, but delivery confirmation (post office shipping) should be - it definitely shows exactly WHEN the purchase was shipped where online shipping only shows that it was expected to ship...
Plus, delivery confirmation only really shows that the package was delivered ... somewhere. There's always the chance that is was delivered to the wrong place, or was stolen from a mailbox or a porch. With signature confirmation, you have confidence that the recipient actually signed. Though yes, sometimes it's not 100% convenient for somebody to synch schedules with a mail carrier or find a way to pick something up at the post office.
Within the U.S. delivery confirmation is pretty cheap. But for shipments from U.K. to U.S., signature confirmation is actually cheaper than Recorded/delivery tracking. Foreign or domestic, you can't usually tell much about the progress of a parcel like you can with (say) UPS until final delivery.
But in response to the original question, I think it should be automatic to request additional $ for reshipping. You kept your part of the bargain under the original contract. If signing is a big problem for the receiver, I'd ask them for a work address first (or the name of a care-of address from a trusted neighbor who ought to be home at delivery time) before I'd settle for a lesser form of confirmation.
