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
I am late to the question, but this is the most recent way to refund/cancel in-app purchases from Google. On you Google Play Console in the left hand menu there is a menu item called Order management. This brings up an order summary with a blue REFUND button at the bottom. Click this, select a reason for the refund and submit.
Explanation on official docs