There are two possible reasons: 

  • External chargeback received,  end-user contacted his bank directly to raise a chargeback. Please read this article to learn more about the PayPal dispute and chargeback flow. 
  • The merchant does not have enough funds to issue a refund in the PayPal account. If it is your early days using a PayPal account with Solid, more likely you will need a bit more transactions at the PayPal account.