TWR you must not refund using the 'send money' button as if you do that PayPal will not recognize it as a refund and will not refund you their fee. Also it will not flag up as a refund on Ebay so you will not get your final value fee refunded by Ebay. You go to your 'recent transactions' on Paypal, choose the person you wish to refund,click the 'refund' button -it will give you a choice of partial or full refund, put in the amount and click send. You will then got a message saying how much has been refunded and how much Paypal has refunded you of their fee. When you go back to Ebay it will have an icon next to the item with either the £ sign greyed out (full refund) or partially greyed out (partial refund)