The basic steps to send a refund through PayPal
To issue a refund on PayPal, log into your account, find the transaction you want to refund in your activity or transaction history, and select the option to refund it. PayPal will then process the money back to the original payment method—usually within a few minutes to a few business days, depending on the original payment source. The person who paid you will see the refund appear in their PayPal account or bank account.
The exact steps differ slightly depending on whether you're using PayPal on a computer or mobile app, and whether the original payment came from a PayPal balance, debit card, or credit card. The process is straightforward for most transactions, but some situations—like payments held for review or payments older than 180 days—have different rules.
Key Takeaways
- Refunds go back to the original payment method: if someone paid from their bank account, the money returns to that bank account, not their PayPal balance.
- Most refunds process within a few minutes to three business days, but bank transfers can take longer depending on your bank.
- You can only refund a transaction within 180 days of the original payment; after that, you'll need to send money manually using PayPal's send money feature.
- If a payment is held for review or flagged as risky, you may not be able to refund it until PayPal releases the hold.
- Refunding a payment does not automatically close a dispute or claim if one has been opened; you may need to cancel that separately.
How to refund a transaction on desktop
Open PayPal in a web browser and log in with your email and password. Click the Activity tab near the top of the page, then look through your transaction history for the payment you want to refund. Click on that transaction to open its details.
Once the transaction details open, look for a button or link that says "Refund" or "Issue a refund." Click it. PayPal will ask you to confirm the refund amount—usually the full amount of the original transaction, but you can refund a partial amount if you choose. Select whether you want to add a note explaining the refund to the buyer, then click "Issue Refund" or "Confirm." The refund will process immediately, and you'll see a confirmation message.
How to refund a transaction on the PayPal mobile app
Open the PayPal app and tap the Activity icon at the bottom of the screen (it looks like a clock or list). Scroll through your recent transactions and tap the one you want to refund. This opens the transaction details page.
On the details page, tap the three dots or menu icon in the top right corner. A menu will appear with options; select "Refund" or "Issue a refund." You'll be asked to confirm the refund amount and can add a note if you want. Tap "Issue Refund" to complete the process. The refund will show as pending in your activity, and the buyer will be notified.
Where the refunded money goes
The refunded money returns to the original payment method used in the transaction. If the buyer paid you from their bank account linked to PayPal, the refund goes back to that bank account. If they paid from their PayPal balance, the money returns to their PayPal balance. If they used a credit or debit card, the refund goes back to that card.
This matters because refunds to bank accounts and cards take longer than refunds to PayPal balances. A refund to a PayPal balance usually appears within minutes. A refund to a linked bank account typically takes one to three business days. A refund to a credit card can take five to ten business days, depending on the card issuer.
Refunding payments older than 180 days
PayPal only allows you to refund a transaction using the standard refund button if the original payment was made within the last 180 days. If you're trying to refund something older than that, the refund option will not appear in the transaction details.
To refund an older payment, you'll need to send money manually. Go to the "Send & Request" section of PayPal, select "Send Money," enter the buyer's email address or phone number, enter the refund amount, and complete the transaction. This sends money from your PayPal balance as a separate payment rather than as a refund of the original transaction. Make sure you have enough balance in your PayPal account to cover it, or link a bank account or card to fund the transfer.
What to do if a payment is on hold or under review
If a payment is held by PayPal for review—usually for security reasons or because it's a new seller—you may not see a refund option for that transaction. PayPal typically holds payments for up to 21 days while it reviews the transaction. During this time, the money is in your PayPal account but you cannot withdraw it or refund it.
If you need to refund a held payment, wait until PayPal releases the hold, then use the standard refund process. If the hold is taking longer than expected or you believe it's an error, contact PayPal Support through the Resolution Center or the Help section of your account. Explain the situation and ask them to release the hold or process the refund manually.
Refunding partial amounts and full refunds
When you open the refund screen, PayPal automatically fills in the full transaction amount. You can change this to a partial refund if you only want to return part of the payment. This is useful if the buyer is disputing only part of the charge or if you're offering a partial credit for a damaged item.
Enter the amount you want to refund, add a note explaining the partial refund if you want, and complete the refund. The buyer will see the partial refund in their account, and you'll keep the difference. You can issue multiple partial refunds for the same transaction if needed, as long as the total does not exceed the original payment amount.
Refunds and disputes or claims
If a buyer has opened a dispute or filed a claim against the transaction, issuing a refund does not automatically close that dispute. You'll need to close it separately through the Resolution Center. After you issue the refund, go to the Resolution Center, find the dispute, and look for an option to close it or mark it as resolved.
If you refund the full amount of a disputed transaction, the buyer can still close the dispute themselves, which usually happens within a few days. If they don't close it, you can contact PayPal Support to ask them to close it on your behalf. Keeping disputes open can affect your account standing, so it's worth following up to make sure it's closed once the refund is processed.
Frequently Asked Questions
How long does a PayPal refund take to show up?
Refunds to a PayPal balance appear within minutes. Refunds to a bank account take one to three business days. Refunds to a credit or debit card can take five to ten business days, depending on the card issuer. The timeline depends on the original payment method, not on how quickly PayPal processes it.
Can I refund a payment if the buyer disputes it?
Yes, you can refund a disputed payment at any time. Issuing a refund does not automatically close the dispute, so you'll need to go to the Resolution Center and close it separately. Closing the dispute quickly can help protect your account from negative marks.
What if I refund the wrong amount?
If you refund too much, you can send an invoice or request money from the buyer for the difference. If you refund too little, you can issue another partial refund for the remaining amount. Both transactions will show in your activity history.
Can I cancel a refund after I've issued it?
Once you click "Issue Refund," the refund cannot be cancelled. If you made a mistake, contact PayPal Support immediately and explain the situation. They may be able to help, but the refund will likely have already been processed to the buyer's account or bank.
Do I get my PayPal fees back when I issue a refund?
No. When you refund a payment, PayPal does not return the transaction fees you paid on the original sale. The buyer receives the full amount they paid, but you do not recover the processing fees. This is standard across payment processors.