What might cause a merchant to refund a customer a higher amount than the initial purchase price?

The situation where a merchant refunds a customer a higher amount than what was originally paid can indeed arise from exchange rate fluctuations. Specifically, if a customer made a purchase in a different currency, and the value of that currency rose relative to the merchant's currency at the time of the refund, the merchant would have to refund the customer at the new, higher exchange rate. This means that if the exchange rate changed in favor of the customer after the purchase was made, the refund amount, when converted back to the customer's currency, could exceed the initial purchase amount.

In contrast, while there are valid reasons for a refund like a customer changing their mind or receiving a defective item, these scenarios would not typically result in a refund that exceeds the original payment. Merchant pricing errors could lead to refunds, but these would usually involve correcting the price to the correct amount rather than issuing a higher refund based on fluctuations in currency exchange rates. Therefore, the exchange rate factor is a unique situation that can legitimately lead to such an outcome.