diff --git a/.env.example b/.env.example
index 7d6ab47..34660fa 100644
--- a/.env.example
+++ b/.env.example
@@ -50,6 +50,7 @@ MONERO_RPC_PORT=18082
 MONERO_RPC_SSL=false
 MONERO_VENDOR_PAYMENT_REQUIRED_AMOUNT=0.4
 MONERO_VENDOR_PAYMENT_MINIMUM_AMOUNT=0.04
+MONERO_VENDOR_PAYMENT_REFUND_PERCENTAGE=80
 MONERO_ADDRESS_EXPIRATION_TIME=1440
 
 # Marketplace Settings
diff --git a/app/Http/Controllers/AdminController.php b/app/Http/Controllers/AdminController.php
index 72440da..c445c47 100755
--- a/app/Http/Controllers/AdminController.php
+++ b/app/Http/Controllers/AdminController.php
@@ -978,20 +978,80 @@ public function denyVendorApplication(VendorPayment $application)
         }
 
         try {
+            \DB::beginTransaction();
+
+            // Get refund percentage from config
+            $refundPercentage = config('monero.vendor_payment_refund_percentage');
+            if ($refundPercentage <= 0) {
+                throw new \Exception('Refund percentage must be greater than zero');
+            }
+
+            // Calculate refund amount
+            $refundAmount = $application->total_received * ($refundPercentage / 100);
+
+            // Get random verified return address
+            $returnAddress = $application->user->returnAddresses()
+                ->where('is_verified', true)
+                ->inRandomOrder()
+                ->first();
+
+            if (!$returnAddress) {
+                throw new \Exception('No verified return address found for user');
+            }
+
+            // First update application status
             $application->update([
                 'application_status' => 'denied',
                 'admin_response_at' => now()
             ]);
 
-            Log::info("Vendor application denied for user {$application->user_id}");
+            try {
+                // Initialize WalletRPC with increased timeout
+                $config = config('monero');
+                $walletRPC = new \MoneroIntegrations\MoneroPhp\walletRPC(
+                    $config['host'],
+                    $config['port'],
+                    $config['ssl'],
+                    30000  // 30 second timeout
+                );
+
+                // Process refund
+                $result = $walletRPC->transfer([
+                    'address' => $returnAddress->monero_address,
+                    'amount' => $refundAmount,
+                    'priority' => 1
+                ]);
+
+                // Update refund details only if transfer successful
+                $application->update([
+                    'refund_amount' => $refundAmount,
+                    'refund_address' => $returnAddress->monero_address
+                ]);
+
+                $refundMessage = "Refund of {$refundAmount} XMR has been processed.";
+            } catch (\Exception $e) {
+                Log::error('Error processing refund: ' . $e->getMessage());
+                $refundMessage = "Application denied but refund failed. Please process refund manually.";
+                
+                // Still update refund details for manual processing
+                $application->update([
+                    'refund_amount' => $refundAmount,
+                    'refund_address' => $returnAddress->monero_address
+                ]);
+            }
+
+            \DB::commit();
+
+            Log::info("Vendor application denied for user {$application->user_id}. Refund processed: {$refundAmount} XMR to address {$returnAddress->monero_address}");
 
             return redirect()->route('admin.vendor-applications.show', $application)
-                ->with('success', 'Application denied successfully.');
+                ->with('success', "Application denied successfully. " . $refundMessage);
 
         } catch (\Exception $e) {
+            \DB::rollBack();
             Log::error('Error denying vendor application: ' . $e->getMessage());
             return redirect()->back()
-                ->with('error', 'An error occurred while processing the application.');
+                ->with('error', 'An error occurred while processing the application and refund.');
         }
     }
 
diff --git a/app/Models/VendorPayment.php b/app/Models/VendorPayment.php
index ad23f8b..ba4eaea 100755
--- a/app/Models/VendorPayment.php
+++ b/app/Models/VendorPayment.php
@@ -23,11 +23,14 @@ class VendorPayment extends Model
         'application_status',
         'application_images',
         'application_submitted_at',
-        'admin_response_at'
+        'admin_response_at',
+        'refund_amount',
+        'refund_address'
     ];
 
     protected $casts = [
         'total_received' => 'decimal:12',
+        'refund_amount' => 'decimal:12',
         'expires_at' => 'datetime',
         'payment_completed' => 'boolean',
         'application_images' => 'json',
diff --git a/config/monero.php b/config/monero.php
old mode 100644
new mode 100755
index d55b882..afac591
--- a/config/monero.php
+++ b/config/monero.php
@@ -6,5 +6,6 @@
     'ssl' => env('MONERO_RPC_SSL', false),
     'vendor_payment_required_amount' => env('MONERO_VENDOR_PAYMENT_REQUIRED_AMOUNT', 0.4),
     'vendor_payment_minimum_amount' => env('MONERO_VENDOR_PAYMENT_MINIMUM_AMOUNT', 0.04),
+    'vendor_payment_refund_percentage' => env('MONERO_VENDOR_PAYMENT_REFUND_PERCENTAGE', 80), /*This value must never be set to zero.*/
     'address_expiration_time' => env('MONERO_ADDRESS_EXPIRATION_TIME', 1440),
 ];
diff --git a/database/migrations/2025_01_01_000007_create_vendor_payment_subaddresses_table.php b/database/migrations/2025_01_01_000007_create_vendor_payment_subaddresses_table.php
index 4c79178..7108a10 100755
--- a/database/migrations/2025_01_01_000007_create_vendor_payment_subaddresses_table.php
+++ b/database/migrations/2025_01_01_000007_create_vendor_payment_subaddresses_table.php
@@ -24,6 +24,8 @@ public function up()
             $table->json('application_images')->nullable(); // Store up to 4 image paths
             $table->timestamp('application_submitted_at')->nullable();
             $table->timestamp('admin_response_at')->nullable();
+            $table->decimal('refund_amount', 20, 12)->nullable();
+            $table->string('refund_address')->nullable();
             $table->boolean('payment_completed')->default(false);
         });
     }
diff --git a/resources/views/admin/vendor-applications/show.blade.php b/resources/views/admin/vendor-applications/show.blade.php
index 4530fef..2f7cd6a 100644
--- a/resources/views/admin/vendor-applications/show.blade.php
+++ b/resources/views/admin/vendor-applications/show.blade.php
@@ -59,6 +59,20 @@
                 </p>
                 </div>
             </div>
+
+            @if($application->application_status === 'denied' && $application->refund_amount)
+            <div class="vendor-applications-show-section">
+                <h2 class="vendor-applications-show-section-title">Refund Details</h2>
+                <div class="vendor-applications-show-status">
+                    <p class="vendor-applications-show-detail-row">
+                        <strong>Refund Amount:</strong> {{ $application->refund_amount }} XMR
+                    </p>
+                    <p class="vendor-applications-show-detail-row">
+                        <strong>Refund Address:</strong> {{ $application->refund_address }}
+                    </p>
+                </div>
+            </div>
+            @endif
         @endif
 
         <div class="vendor-applications-show-back">
diff --git a/resources/views/become-vendor/index.blade.php b/resources/views/become-vendor/index.blade.php
index dcaa594..32824d4 100755
--- a/resources/views/become-vendor/index.blade.php
+++ b/resources/views/become-vendor/index.blade.php
@@ -57,6 +57,11 @@
                     <p class="become-vendor-index-status-message">Congratulations! Your application has been accepted. You can now access the vendor features.</p>
                 @else
                     <p class="become-vendor-index-status-message">Unfortunately, your application has been denied. You cannot submit a new application at this time.</p>
+                    @if($vendorPayment->refund_amount)
+                        <div class="become-vendor-index-refund-info">
+                            <p class="become-vendor-index-status-message">A refund of {{ $vendorPayment->refund_amount }} XMR has been sent to your return address.</p>
+                        </div>
+                    @endif
                 @endif
             </div>
         @endif