A more thorough explanation:

Definition: Refund is the return of money to a person who has paid more than what was required or owed. This can happen when a person overestimates their tax liability or when an employer withholds too much tax from their earnings.

Examples:

• When John filed his tax return, he realized that he had overpaid his taxes. The government issued him a refund of $500.
• Mary bought a dress online, but it didn't fit her. She returned the dress and received a refund of the purchase price.
• Bob refinanced his mortgage by replacing his old loan with a new one. The new loan had a lower interest rate, which resulted in a refund of the excess interest he had paid on the old loan.

The examples illustrate how a refund is the return of money that was paid in excess. In the first example, John paid more taxes than he owed, so he received a refund. In the second example, Mary paid for a dress that she returned, so she received a refund of the purchase price. In the third example, Bob paid excess interest on his old mortgage, so he received a refund of the excess amount when he refinanced.