How are WooCommerce refunds handled?
If you issue a refund for a WooCommerce order when this order has next updated an adjustment will be applied to the order containing the amount refunded. This will appear in your Order totals area under "Adjustment".
If you have had stock returned to you as part of this refund, we will cancel the order line item returned to you and increase your stock quantity to include the returned item.
If you have partially refunded a WooCommerce order and the customer has also returned/exchanged a product in the sale, then you will also need to adjust your inventory in order to account for this. You can either add inventory adjustments to account for the changes in stock or alternatively if you would like the order to correctly represent the new items you can remove the entire order and manually add it again with the new items.