When refunding, if you see that the issue refund screen indicates that you have insufficient funds, you will not be able to process the refund until there are sufficient funds available to process the refund.
In order to have sufficient funds to refund, you will need the settlement balance to be greater than the refund amount before you can process the refund.
A settlement balance will build up for any paid orders from the date of the last settlement date for your organisation. So if attempting a refund immediately after a settlement has been distributed to your organisation, it is likely that you will not have adequate funds available to process a refund.
For more information about settlement distributions, please click here.