To refund a PayPal payment: Log onto PayPal Click the History subtab. Find the payment you would like to refund and click Details. Click the Issue Refund link (at the very bottom of the page). Enter the refund amount and click Continue.You can issue a partial refund here. It's a good idea to put a note to the customer about what you're refunding. Confirm the details and click Process Refund. You should note when looking at the orders that you can print a shipping label from PayPal, which simplifies things and is a nice way to track the process!