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This guide provides methods for handling payout cancellations and reversals in PayPal integrations. When payments remain unclaimed or are sent incorrectly, you’ll need effective ways to manage these transactions and recover funds. Use these methods to maintain financial accuracy in your applications and provide better service to your users when payment issues arise.

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Cancel a payout item

You can cancel a payout item only if its status is UNCLAIMED. Use the PayPal business account dashboard or Payouts API to cancel unclaimed payout items. To implement payment cancellation functionality, you can use the dashboard or the Payouts API.
Note: Unclaimed payouts expire in 30 days, and PayPal returns the money to your PayPal account.

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Use the dashboard

  1. Log into your PayPal business account.
  2. Select Activity > Transactions > All Transactions.
  3. On the Transactions page:
    1. Select Email address from the drop-down list.
    2. Enter the recipient’s email address in the search box.
    3. Select Filter.
    4. Select the date range.
    5. Select Apply Filters. The search results display the transaction list that match your criteria.
  4. Select the title of the unclaimed payment you want to cancel.
  5. On the details page, select Cancel and follow the on-screen instructions.

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Use the Payouts API

  1. Send the POST request to the /v1/payments/payouts-item/{payout_item_id}/cancel endpoint. Replace {payout_item_id} with the payout item ID retrieved from the Show payout batch details response.
  2. Review the response to confirm the cancellation of the payout item. A successful request returns the HTTP 200 OK status code with a JSON response body that shows payout item details.
curl -v -X POST https://api-m.sandbox.paypal.com/v1/payments/payouts-item/5KUDKLF8SDC7S/cancel \
-H 'Content-Type: application/json' \
-H 'Authorization: Bearer <ACCESS-TOKEN>' \
-d '{}'

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Reverse payouts

PayPal cannot reverse payments that a payer sends to an incorrect email address or phone number. However, if the status of the payout item is UNCLAIMED, a payer can cancel the payout item and create a new payout with the correct recipient details. If not, all unclaimed payouts expire in 30 days, and PayPal returns the money to the payer’s PayPal account.

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API reference

Cancel unclaimed payout item: /v1/payments/payouts-item/{payout_item_id}/cancel
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