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.