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. 
  • If the dispute is opened, PayPal is able to put a temporary hold on the disputed amount until the case will be resolved by the buyer and seller or PayPal. In such cases to resolve the dispute, you will need to go to the PayPal Resolution Center and select the appropriate option, how you would like to respond to the occurred query.  In most cases, there will be an option to issue a full refund to the customer. By selecting this option the held payment will be refunded back to the buyer and the case will be resolved and closed. 
  • 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.