This has happened to me a few times. I've ordered items and then needed to cancel the order before it was shipped. Essentially, I want to void the transaction but PayPal doesn't seem to have a mechanism to do this (or they just don't want to tell us). This results in fees being charged for both the initial transaction and the refund. I find this to be very unfair for PayPal to do this.
Is there a solution? I just tried to reverse a charge for $32. The seller only refunded me $30 because of the fees imposed on the transaction to him. I was then left with $28 after another PayPal fee when the refund was sent to me.
The same thing happened to me and Paypal lied about refunding the fees. And if you call their customer service number for ANYTHING, you get someone in India. I still haven't been able to update my credit card information because they keep asking me for the one that was cancelled YEARS ago so of course I'm not going to have the 3 digit code for that card. I'm so frustrated with paypal and wish another payment system would put them out of business.