returned items marked on account as unpaid?

Why do items that I have returned and payment has been refunded or cancelled as they were pay later still come up on my account as unpaid ?

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This little irritation is the result of poor programming on eBay's part; you can try 'hiding' the purchase and you can try 'marking it as paid' and it will eventually go away.  Until it disappears, you will need to be careful going through checkout.