Occasionally we see clients encounter an issue with products not being properly restocked after a refund using PayPal. In this article, we'll explain why this happens, and what you can do to resolve the issue.
Items are only restocked after a refund is fully processed. Refunds are only processed after the transaction clears, so if a transaction is listed as "pending", then the refund won't finish, and the item won't be automatically restocked.
The solution to this problem is to simply keep extra funds in the PayPal account your business uses for processing refunds. This way PayPal can clear the transaction quicker, and the refund (and therefore the restock action) will process correctly.
If you encounter this issue and need an item to be manually restocked or a refund to be manually processed, please feel free to reach out with a support request.