I have been using Google Play in-app purchases (IAPs) for a long time, but recently (June 20, 2016). They updated the Payments Merchant Center so that test purchases are not
The easiest way to cancel an in-app purchase is to consume it. If you use the Google provided IabHelper you can just call consumeAsync and pass in the Purchase. I maintain a function to consume all the app's in-app products; this is essentially a billing reset function for testing.