How to Refund an Order
Follow step #4 of this Woocommerce document. Select the class to refund in the order, set quantity to one for that class. Set the checkbox that says “Restock Refunded Items”. Verify and/or set the price to be refunded. Include a comment for “Reason for Refund”. This will send the money back via PayPal if used, and will restock that item.