Issuing refunds with PayPal Checkout

When you have PayPal Checkout connected to your store, you can make a full or partial refund from your store admin.

PayPal transactions can be refunded within 180 days of receiving payment. As soon as the refund settles, the funds are sent back to the customer’s bank account. It may take a couple of days to deposit funds. There are no fees to process the refund, but the fees PayPal originally took from you as from the seller are not returned to you. 

If a customer makes a purchase in a currency other than their home currency and later requests a refund of that transaction, their refund amount may not exactly match their original transaction amount due to variable exchange rates.

Creating a refund with PayPal Checkout

When you enable PayPal in your online store, you can choose to issue refunds either from your store admin or from your PayPal account. You can refund the total order amount or just a part of it. If you create a partial refund, you can later return the remaining amount to a client. Depending on your return policy, you can include or exclude any additional spendings in refunds, such as shipping costs, handling fee, or tips. 

After you create a refund, the status of a refunded order will automatically change to the Refunded or Partially refunded. Products won't be automatically restocked, you will have to manually restock your inventory.

To make a full or partial refund with PayPal:

1. From your store admin, go to My sales → Orders.
2. Select an order you want to refund.

3. Click the Update dropdown button near the order and select Refund order.

4. In the Refund Amount, enter the amount you want to return to a customer.
5. (optional) If you do not want to send a notification to a customer, untick the Send email with refund details to customer checkbox.
6. (optional) In the Reason for refund, enter why the customer asked for a refund or what products were refunded.
7. Click Refund.

The transfer process between your and your client’s banks may take several business days, depending on the bank. If a customer hasn't received money after 14 business days, they must contact their bank.

You can get the details about the refund in your PayPal account. You can get there by opening the order details page and clicking Transaction details:

Restocking refunded inventory

Depending on the situation, your customers may need to return an item before you can issue a refund. In that case, you will need to manually update the stock quantity for a product since it won’t be automatically restocked.

To rectock a refunded order:

1. From your store admin, go to My sales → Orders page.
2. Find the returned order and change its fulfillment status to Returned.
3. Select the order and click on a refunded product.
4. In the Stock Control section on the right-hand side, click Manage.
5. Update the quantity.
6. Click Save.