// MCP TOOL REFERENCE

create_refund

Process a refund for a captured payment

Moves money back to payer

Part of the PayPal MCP server. Enforce policies on this tool with Intercept, the open-source MCP proxy.

@paypal/paypal-mcp-server Financial Risk 5/5

// WHEN AI AGENTS USE THIS TOOL

AI agents use create_refund to initiate financial transactions through PayPal. Financial operations involve real money and are irreversible once processed. Intercept blocks financial tools by default, requiring explicit human approval with transaction-level limits to prevent unauthorised spending.

// WHY ENFORCE A POLICY ON CREATE_REFUND

create_refund moves real money. Without a policy, an autonomous agent could initiate transactions that drain accounts or exceed budgets. Intercept blocks financial tools by default, requiring human-in-the-loop approval with configurable spending limits per transaction and per time window.

// RECOMMENDED POLICY

Financial tools involve real money. Block by default and require explicit human approval before enabling.

paypal.yaml

tools:
  create_refund:
    rules:
      - action: deny
        reason: "Requires human approval"

See the full PayPal policy for all 30 tools.

// DETAILS

Tool Name create_refund

Category Financial

MCP Server PayPal MCP Server

Risk Level Critical

// MORE PAYPAL TOOLS

Financial pay_order Financial send_invoice Destructive cancel_sent_invoice Destructive cancel_subscription Write accept_dispute_claim Write create_invoice Write create_order Write create_product

View all 30 tools →

// WHAT CAN GO WRONG

Agents calling financial-class tools like create_refund have been implicated in these attack patterns. Read the full case and prevention policy for each:

Browse the full MCP Attack Database →

// OTHER FINANCIAL TOOLS ACROSS MCP SERVERS

Other tools in the Financial risk category across the catalogue. The same policy patterns (deny, require_approval) apply to each.

AbraFlexi bank_transaction_create AbraFlexi invoice_issued_create AgentPact agentpact.request_refund Wise cancel_transfer Wise create_transfer Wise fund_transfer

// IN CONTEXT OF CRITICAL RISK

create_refund is one of the critical-risk operations in PayPal. For the full severity-focused view — only the critical-risk tools with their recommended policies — see the breakdown for this server, or browse all critical-risk tools across every MCP server.

// RELATED READING

// FAQ

What does the create_refund tool do? +

Process a refund for a captured payment. It is categorised as a Financial tool in the PayPal MCP Server, which means it involves financial transactions. Block by default and require explicit approval.

How do I enforce a policy on create_refund? +

Add a rule in your Intercept YAML policy under the tools section for create_refund. You can allow, deny, rate-limit, or validate arguments. Then run Intercept as a proxy in front of the PayPal MCP server.

What risk level is create_refund? +

create_refund is a Financial tool with critical risk. Critical-risk tools should be blocked by default and only enabled with explicit human approval.

Can I rate-limit create_refund? +

Yes. Add a rate_limit block to the create_refund rule in your Intercept policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.

How do I block create_refund completely? +

Set action: deny in the Intercept policy for create_refund. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.

What MCP server provides create_refund? +

create_refund is provided by the PayPal MCP server (@paypal/paypal-mcp-server). Intercept sits as a proxy in front of this server to enforce policies before tool calls reach the server.

create_refund

Enforce policies on PayPal