A refund always returns the full amount to the buyer's card. What it means for the seller depends on whether the payment had been released.
Every refund returns the whole payment to the card it was paid with. Nothing is kept back from the buyer.
The seller refunds a payment under Finances › Overview and can give a reason, which the buyer reads. A payment is also refunded automatically when a buyer's concern goes unanswered for 30 days, and when a bank decides a dispute in the buyer's favour.
The seller had not been paid, so nothing is taken from them. The card network keeps its card fee, which is the seller's cost.
What the seller received for that payment is taken back from their Stripe account, together with the card fee, and Otute returns its own fee. If the seller's balance cannot cover it, the rest becomes an amount owed to Otute.
Otute sends the refund straight away. The buyer's bank usually shows it within 5–10 business days. Both sides are told when it is sent, and the payment shows as Refunded for both.