CYAssets ?

I am putting together the costs for shipping out DVDS and am a little confuzzed. There are several instances in which I can see a chargeback occuring:

1. SNAD
2. Damage
3. Customer didn't receive item
4. Customer didn't order item
5. Customer fraud

In an effort to provide outstanding customer service I would like to have a remedy to these issues. The first three I can control somewhat by:

1. accurate listings
2. packing well
3. Shipping to confirmed addresses

How can I ensure that the customer DID infact order the item, contact them after the transaction? Also, what steps can I take to ensure that they aren't trying to pull a fast one? Does this happen often?

I am a big believer in DC and would love to offer shipping insurance but insurance is going to jack the S/H up $1.70. As a result my cost for shipping will be more than what I would be charging the customer for it, $3.95 for the first item $1.50 each additional.

This IS the catch-22 sellers face, isn't it? Don't offer insurance and something happens and I am stuck with eating the costs. Offer insurance and S/H goes over the amount I charged for it.

Here are the questions:
1. Is it really worth it for "small" valued items (under $10 in sales)?
2. Should I take the extra out of the charge for product not including S/H?

Thanks for your input!