Small module enabling refunds on Magento 1.x Paypal standard payments

app->code->local->Namespace->Modulename->etc->config.xml

<?xml version="1.0"?>
<config>

    <modules>
        <Namespace_Modulename>
            <version>0.0.1</version>
            <depends>
                <!-- <MageCoders_PaypalMulticurrency /> -->
                <Mage_Paypal />
                <!-- <AW_Storecredit /> -->
            </depends>
        </Namespace_Modulename>
    </modules>

    <global>
        <models>
            <modulename>
                <class>Namespace_Modulename_Model</class>
            </modulename>
        </models>
    </global>

    <adminhtml>
        <events>
            <sales_order_payment_refund>
                <observers>
                    <modulename>
                        <type>singleton</type>
                        <class>Namespace_Modulename_Model_Model_Observer</class>
                        <method>creditMemo</method>
                    </modulename>
                </observers>
            </sales_order_payment_refund>
        </events>
    </adminhtml>
    
    <!-- Left out config for module setting 'modulename/active', ACL and other crap. -->
    
</config>

app->code->local->Namespace->Modulename->Model->Namespace_Modulename_Model_Observer.php

<?php
/**
 * app/code/local/Namespace/Modulename/Model/Namespace_Modulename_Model_Observer.php
 */

class Namespace_Modulename_Model_Model_Observer
{

    /**
     * Observer for paypal standard payments refund
     *
     * @param Varien_Event_Observer $observer
     * @throws Mage_Core_Exception
     */
    public function creditMemo(Varien_Event_Observer $observer)
    {
        $payment     = $observer->getEvent()->getPayment();
        $paymentCode = $payment->getMethod();
        $storeId     = $payment->getOrder()->getStoreId();
            
        // check if we should handle paypal refunds
        if (Mage::getStoreConfigFlag('modulename/paypal/active', storeId)) {
            if ($paymentCode == "paypal_standard") {

                $creditmemo = $observer->getEvent()->getCreditmemo();
                // instantiate our model directly instead of keeping rewrite in config (why not)
                $paypal     = Mage::getModel('modulename/paypal');
                //$paypal     = Mage::getModel('paypal/pro');

                if ($paypal && method_exists($paypal, 'tryRefund')) {
                    $ares = $paypal->tryRefund($payment, $creditmemo->getGrandTotal());

                    if ($ares[0] == 0) {
                        Mage::getSingleton('adminhtml/session')->addSuccess($ares[1]);
                    } elseif ($ares[0] > 1) {
                        throw new Mage_Core_Exception($ares[1]);
                    } elseif ($ares[0] < 0) {
                        throw new Mage_Core_Exception($ares[1]);
                    }
                    $payment
                        ->getOrder()
                        ->addStatusToHistory($payment
                            ->getOrder()
                            ->getStatus(), $ares[1]);
                }
            }
        }
    }

    /**
     * Observer for paypal standard payments cancel order
     *
     * @param Varien_Event_Observer $observer
     * @throws Mage_Core_Exception
     */
    public function orderCancel(Varien_Event_Observer $observer)
    {
        $payment     = $observer->getEvent()->getPayment();
        $paymentCode = $payment->getMethod();
        $storeId     = $payment->getOrder()->getStoreId();
        
        // check if we should handle paypal refunds
        if (Mage::getStoreConfigFlag('paymentaddon/paypal/active', $storeId)) {
            if ($paymentCode == "paypal_standard") {

                // if payment is pending, then we have no money to return
                $order = $payment->getOrder();
                if ($order && $order->getState() == 'pending_payment') {
                    return;
                }

                // instantiate our model directly instead of keeping rewrite in config (why not)
                $paypal = Mage::getModel('paymentaddon/paypal');
                //$paypal = Mage::getModel('paypal/pro');
                
                if ($paypal && method_exists($paypal, 'tryCancel')) {
                    $ares = $paypal->tryCancel($payment);

                    if ($ares[0] == 0) {
                        if ($ares[1] != "") {
                            Mage::getSingleton('adminhtml/session')->addSuccess($ares[1]);
                        }
                    } elseif ($ares[0] > 1) {
                        throw new Mage_Core_Exception($ares[1]);
                    } elseif ($ares[0] < 0) {
                        throw new Mage_Core_Exception($ares[1]);
                    }
                    $payment
                        ->getOrder()
                        ->addStatusToHistory($payment
                            ->getOrder()
                            ->getStatus(), $ares[1]);
                }
            }
        }
    }
}

app->code->local->Namespace->Modulename->Model->Namespace_Modulename_Model_Paypal.php

<?php
/**
 * app/code/local/Namespace/Modulename/Model/Namespace_Modulename_Model_Paypal.php
 */

class Namespace_Modulename_Model_Paypal extends Mage_Paypal_Model_Standard
{

    protected $_canRefund                   = true;
    protected $_canRefundInvoicePartial     = true;
    protected $_canVoid                     = true;

    /**
     * https://developer.paypal.com/webapps/developer/docs/classic/api/merchant/RefundTransaction_API_Operation_NVP/
     */
    public function tryRefund(Varien_Object $payment, $amount)
    {
        $transactionId = $payment->getLastTransId();
        if ($transactionId) {

            $order          = $payment->getOrder();
            $storeId        = $order->getStoreId();
            $refundType     = "Partial";

            $invoiceFee = $payment->getMethodInstance()->getInfoInstance()->getAdditionalInformation('invoice_fee');
            $remaining  = $order->getTotalInvoiced() - ($order->getTotalOfflineRefunded() + $order->getTotalOnlineRefunded()) - $invoiceFee;
            if (abs($remaining - $amount) < 0.00001) {
                $refundType = "Full";
            }

            $currencyCode   = $order->getBaseCurrencyCode();
            $invoiceId      = $order->getIncrementId();

            $params = array(
                "METHOD"        => "RefundTransaction",
                "VERSION"       => "72.0",
                "TRANSACTIONID" => $transactionId,
                "INVOICEID"     => $invoiceId,
                "REFUNDTYPE"    => $refundType,
                "AMT"           => $amount,
                "CURRENCYCODE"  => $currencyCode,
                "USER"          => Mage::getStoreConfig('paypal/wpp/api_username', $storeId),
                "PWD"           => Mage::getStoreConfig('paypal/wpp/api_password', $storeId),
                "SIGNATURE"     => Mage::getStoreConfig('paypal/wpp/api_signature', $storeId)
            );

            $ch = curl_init();
            curl_setopt($ch, CURLOPT_URL, "https://api-3t.paypal.com/nvp");
            curl_setopt($ch, CURLOPT_HEADER, false);
            curl_setopt($ch, CURLOPT_SSL_VERIFYPEER, false);
            curl_setopt($ch, CURLOPT_POST, true);
            curl_setopt($ch, CURLOPT_RETURNTRANSFER, true);
            curl_setopt($ch, CURLOPT_POSTFIELDS,  http_build_query($params));

            $response = curl_exec($ch);

            if (curl_errno($ch)) {
                curl_close($ch);
                throw new Mage_Core_Exception('Impossible to issue a refund transaction because of cURL error.');
            } else  {
                curl_close($ch);
                $responseArray = array();
                parse_str($response, $responseArray); // Break the NVP string to an array

                if ($responseArray['ACK'] == "Success") {
                    return array(0, "Paypal refunded successfully");
                } else {
                    return array(-1, "Paypal refund failed!");
                }
            }
        } else {
            Mage::throwException(Mage::helper('paypal')->__('Impossible to issue a refund transaction because the capture transaction does not exist.'));
        }
    }
}