What happens if my Instant Transfer payment is refunded?
When you make an Instant Transfer payment with your bank account and the seller refunds your payment in the first 2-5 business days after the payment was made, the money may be temporarily held. The transfer between the bank and PayPal can take 2-5 business days, so we put this hold in place to make sure the bank transfer clears. Your money will be available after the payment status changes from "Placed" to "Completed.” There is no hold if the payment has already completed from the bank to PayPal. The money will be sent back to your bank account once the refund is complete.
You’ll see a separate transaction that shows your Instant Transfer payment as "Refunded."