Shopify + Paypal: Customers order refunded without their consent

Topic summary

A merchant received their first PayPal Express Checkout order through Shopify, but PayPal automatically refunded the customer without anyone’s consent shortly after the transaction.

The Shopify system shows the refund as “Manually refunded from PayPal,” though neither the merchant nor customer initiated it. This occurred after the merchant had to create a new PayPal account to receive the funds.

The merchant is seeking guidance on:

  • Why the automatic refund occurred
  • Whether the money is actually returning to the customer
  • How to proceed since the customer still wants to receive their order

A screenshot is included showing the refund details in the Shopify system.

Summarized with AI on November 1. AI used: claude-sonnet-4-5-20250929.

Please help (everyone probably starts like this),

Customer placed an order on shopify yesterday using paypal express checkout. This is my first order of this payment, so I had to create an account to receive funds. Not long after, Paypal automatically refunded the customer. The customer did not do this, shopify message states Manually refunded from PayPal.

The customer wants the goods, what do I do? Is the money going back to them or what?