How do I issue a refund when my PayPal account is limited?
You’ll be able to issue a refund once the limitation on your PayPal account is resolved. To resolve the account limitation, please click Go to Account Limitations in the Resolution Centre, and complete each of the required response.
If you're refundning the buyer for a dispute case, the dispute will be closed automatically after you issue a full refund. If you choose to issue a partial refund, the dispute will remain open and the buyer can choose to accept or refuse your partial refund offer.