I completely disagree with you on this Ged.
My view is simple. Until you have supplied what the buyer has paid for, in an acceptable condition, you have not completed the transaction. So if the PO damage the record before it reaches the buyer, he has not received what he has paid for in an acceptable condition, so it's still your responsibility to sort it out.
If you were running a pub, and a keg of beer was delivered and was obviously empty, would you accept it and say you would sort it out ? Of course not, you'd send it back to the brewery and expect either a refund or replacement. And the brewery wouldn't expect you to accept an empty keg, or try and make you sort it out with the delivery company would they. So why is it any different with a record.