If you want to refund a customer for a Sale transaction you previously processed, you must process a refund. You can send your customer a refund within 60 days after receiving the original payment by clicking the Issue Refund link on the Transaction Details page. After 60 days of receiving the payment, you need use the Send Money tab to send the refund.
To send a refund within 60 days of receiving the original payment:
Log in to your PayPal account at https://www.paypal.com.
Click the History tab.
Find the payment you would like to refund and click Details to open the Transaction Details page.
Click Issue Refund on the Transaction Details page.
Enter the full or a partial refund amount and an optional message to the customer, and click Continue. Be sure that the refund amount does not exceed the original amount.
Verify the refund amount and click Issue Refund.
The original transaction fee is credited back to you when you perform a refund within 60 days of receiving payment. If you perform a partial refund, a portion of the transaction fee will be credited back to you.
To send a refund after 60 days of receiving payment:
Log in to your PayPal account at https://www.paypal.com.
Click the Send Money tab.
Enter the required information and click Continue.
Review the information on the confirmation page and click Send Money to complete your transaction.