See here:  <a href="https:&#x2F;&#x2F;help.bitpay.com&#x2F;15596-payments-refunds&#x2F;how-do-i-refund-a-fully-paid-invoice?from_search=12707112" rel="nofollow">https:&#x2F;&#x2F;help.bitpay.com&#x2F;15596-payments-refunds&#x2F;how-do-i-refu...</a><p>It seems that BitPay (the payment provider used Steam and many other merchants who accept Bitcoins) gets a dollar valued refund amount from the merchant (so you can do partial refunds).  Then they calculate the Bitcoin value of the refund amount at the current exchange rate and send that much bitcoin back to the user.  There&#x27;s an extra Bitcoin transaction fee involved.  I&#x27;m sure BitPay keeps a few thousand dollars worth of Bitcoin on hand to pay refunds, and I&#x27;m sure refunds are rare enough that any frictional costs are much smaller than what they bring in through their own fees.<p>So basically the user is taking on the exchange rate risk -- if you buy a game, Bitcoins go up 20% overnight and then you request a refund, your refund amount will be less Bitcoins than you originally paid.  If they did it any other way then it would be subject to abuses that would allow users and merchants to collude to extract money from BitPay (BitPay would essentially be writing options which would allow users to buy back bitcoins that were sold on their behalf in the past at the same price they were sold, even if that&#x27;s substantially different from the current market price).