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Let me help you record a customer refund that was paid through Paypal in QuickBooks Online (QBO), jokittens---28-.
To track this one, we can enter an expense or checks and add an account for the fee. Then, consult your accountant on what posting account we need to use for the Paypal transaction fee.
Then, match the refund transaction from Paypal into your bank feeds transactions. You can refer to this article for the detailed steps about matching bank transactions: Match and categorize bank transactions in QuickBooks Online.
I've got a link here that provides you with articles about managing your bank feeds: Find help with bank feeds and reconciling accounts.
Keep me posted if you need a hand with with reconciling your Paypal or bank account or any QBO related. I'll be here to help. Have a great day ahead.