Question about shipping damage

I recently sold an amp and when the buyer received it he contacted me stating that the "speaker a" binding post were broken but the smp powered up and worked fine. Then I received another message from the buyer stating that one channel went out and the other was distorting.

I had taken the amp to a UPS store to have it packed and I watched the attendant pack it. She did a really good job of packing it with several sheets of bubble wrap and foam and then double boxed it (packing peanuts in the outer box).

The buyer even commented on how well it was packed. I insured it for more than the value so I think I'm covered.

My question is how to proceed from here. The buyer said the box was undamaged so I am mystified as to how the binding posts could get damaged and further more what could cause the amp to distort.

Has any one ever had this happen? If so what course of action did you take with UPS. Should I have the amp sent back and file the claim or contact UPS immediately and then have a pick-up scheduled.

Any direction or words of wisdom are greatly appreciated. Thanks.
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Here's their latest commercial:

As you say, they packed the item.
They should be responsible.

As Daniel just said, you are in a good position because you had them do the packing. Call your store and get it taken care of. And ask the customer to put a big dent in the corner of the box before he takes the pics ;-). Just to be safe. Agree with Elizabeth--they do not do as good a job packing as you or I could.
Thank your for the insight and I agree on several points. I have refunded the buyer and spoke with the manager at the store and after appoligizing for not packing er. After apologizing for not packing it better, he told me he would handle the claim process for me and stated that they would make it right. How this will shake out I can't say but chalking it up to lesson learned.

After reading of horror stories in regards to both of the major shipping provider and aside from packing it myself what else should I do to insure safe travel? I have read in other forums where gear was shipped in original packaging and still suffered major damages.

Thanks for the responses.
Problem is, many original packing boxes are entirely inadequate. I think many packages are designed to be shipped palletized in a large bundle and that's a different kettle of fish from shipping a single item. Marantz, Cambridge, & PS Audio are brands I've bought with woefully poor transport boxes. UPS says packaging needs to be stout enough to survive a 4 foot drop onto bare concrete, so think about how that relates to what's needed for a heavy amp, etc. I'm lucky in that I have access to very good packing materials through my job and I make most of my own shipping boxes from double wall corrugated cardboard. I glue the corners with wood glue and reinforce them. As Elizabeth mentioned, surrounding equipment with foam of adequate density is vastly better than bubble wrap. It is hard to source unless you have a Uline store close by and it costs too much. If you do use bubble wrap, use the heavy duty variety with fat 1" bubbles, not the thin stuff with 1/3" bubbles. Peanuts have no place at all in packing heavy audio equipment. When I need to fill the space between a double box, I use pieces of expanded polystyrene sheet that's used for wall insulation.