If you initiated an authorization, and now want to refund the customer, you must void the authorization. Voids are available on Authorization transaction types only. After you void an Authorization transaction, you cannot capture any funds associated with that transaction, and the funds are returned to the customer.
Voiding an authorization cancels the entire open amount. You can initiate a void if:
the authorization is pending.
the authorized amount was captured at less than 100%.
To void an Authorization transaction:
Log in to your PayPal account at https://www.paypal.com.
Click the History tab.
Click the Details button associated with the authorization you want to void.
On the Transaction Details page, click on the Void button associated with the authorization.
Verify the void details on the Void Authorization section. Optionally add a note to the buyer explaining the void, and click Continue.
Click Void on the Confirm Void page.
After performing an authorization using the Virtual Terminal, you can immediately perform a void action by clicking the Transaction ID on the Transaction confirmation page. Follow the step 3 above to void the transaction.