diff --git a/paypal/pro/helpers.py b/paypal/pro/helpers.py
index 4942bf2..f6bf283 100644
--- a/paypal/pro/helpers.py
+++ b/paypal/pro/helpers.py
@@ -190,7 +190,13 @@ def manangeRecurringPaymentsProfileStatus(self, params, fail_silently=False):
         return nvp_obj
         
     def refundTransaction(self, params):
-        raise NotImplementedError
+        defaults = {"method": "refundTransaction", "refundtype": 'Full'}
+        required = L("transactionid")
+
+        nvp_obj = self._fetch(params, required, defaults)
+        if nvp_obj.flag:
+            raise PayPalFailure(nvp_obj.flag_info)
+        return nvp_obj
 
     def _is_recurring(self, params):
         """Returns True if the item passed is a recurring transaction."""
diff --git a/paypal/standard/ipn/models.py b/paypal/standard/ipn/models.py
index 932972f..fe4f5f6 100644
--- a/paypal/standard/ipn/models.py
+++ b/paypal/standard/ipn/models.py
@@ -24,9 +24,11 @@ def _verify_postback(self):
     def send_signals(self):
         """Shout for the world to hear whether a txn was successful."""
         # Transaction signals:
-        if self.is_transaction():
+        if self.is_transaction() and not self.is_recurring():
             if self.flag:
                 payment_was_flagged.send(sender=self)
+            elif self.is_refund():
+                payment_refunded.send(sender=self)
             else:
                 payment_was_successful.send(sender=self)
         # Recurring payment signals:
@@ -38,6 +40,9 @@ def send_signals(self):
                 recurring_payment.send(sender=self)
             elif self.is_recurring_cancel():
                 recurring_cancel.send(sender=self)
+            elif self.is_refund():
+                recurring_refunded.send(sender=self)
+
         # Subscription signals:
         else:
             if self.is_subscription_cancellation():
diff --git a/paypal/standard/ipn/signals.py b/paypal/standard/ipn/signals.py
index f0d010f..22b91c9 100644
--- a/paypal/standard/ipn/signals.py
+++ b/paypal/standard/ipn/signals.py
@@ -12,6 +12,9 @@
 # Sent when a payment is flagged.
 payment_was_flagged = Signal()
 
+# Sent when a payment is refunded
+payment_refunded = Signal()
+
 # Sent when a subscription was cancelled.
 subscription_cancel = Signal()
 
@@ -30,4 +33,6 @@
 # recurring_payment
 recurring_payment = Signal()
 
-recurring_cancel = Signal()
\ No newline at end of file
+recurring_cancel = Signal()
+
+recurring_refunded = Signal()
diff --git a/paypal/standard/ipn/tests/test_ipn.py b/paypal/standard/ipn/tests/test_ipn.py
index 376b51d..17e9007 100644
--- a/paypal/standard/ipn/tests/test_ipn.py
+++ b/paypal/standard/ipn/tests/test_ipn.py
@@ -3,17 +3,17 @@
 from django.test import TestCase
 from django.test.client import Client
 
-from paypal.standard.models import ST_PP_CANCELLED
+from paypal.standard.models import ST_PP_CANCELLED, ST_PP_REFUNDED
 from paypal.standard.ipn.models import PayPalIPN
 from paypal.standard.ipn.signals import (payment_was_successful, 
-    payment_was_flagged)
+    payment_was_flagged, recurring_refunded, payment_refunded)
 
 
 IPN_POST_PARAMS = {
     "protection_eligibility": "Ineligible",
     "last_name": "User",
     "txn_id": "51403485VH153354B",
-    "receiver_email": settings.PAYPAL_RECEIVER_EMAIL,
+    "receiver_email": str(settings.PAYPAL_RECEIVER_EMAIL),
     "payment_status": "Completed",
     "payment_gross": "10.00",
     "tax": "0.00",
@@ -60,7 +60,7 @@ def tearDown(self):
         settings.DEBUG = self.old_debug
         PayPalIPN._postback = self.old_postback
 
-    def assertGotSignal(self, signal, flagged):
+    def assertGotSignal(self, signal, flagged, params=IPN_POST_PARAMS):
         # Check the signal was sent. These get lost if they don't reference self.
         self.got_signal = False
         self.signal_obj = None
@@ -70,7 +70,7 @@ def handle_signal(sender, **kwargs):
             self.signal_obj = sender
         signal.connect(handle_signal)
         
-        response = self.client.post("/ipn/", IPN_POST_PARAMS)
+        response = self.client.post("/ipn/", params)
         self.assertEqual(response.status_code, 200)
         ipns = PayPalIPN.objects.all()
         self.assertEqual(len(ipns), 1)        
@@ -115,11 +115,33 @@ def test_vaid_payment_status_cancelled(self):
         ipn_obj = PayPalIPN.objects.all()[0]
         self.assertEqual(ipn_obj.flag, False)
         
-
     def test_duplicate_txn_id(self):       
         self.client.post("/ipn/", IPN_POST_PARAMS)
         self.client.post("/ipn/", IPN_POST_PARAMS)
         self.assertEqual(len(PayPalIPN.objects.all()), 2)        
         ipn_obj = PayPalIPN.objects.order_by('-created_at')[0]
         self.assertEqual(ipn_obj.flag, True)
-        self.assertEqual(ipn_obj.flag_info, "Duplicate txn_id. (51403485VH153354B)")
\ No newline at end of file
+        self.assertEqual(ipn_obj.flag_info, "Duplicate txn_id. (51403485VH153354B)")
+
+    def test_refund_for_recurring_payment(self):
+        update = {
+            "payment_status": ST_PP_REFUNDED,
+            "reason_code": "refund",
+            "parent_txn_id": "1NK420530S625752Y",
+            "recurring_payment_id": "I-N8KNB3KKD9NF"
+        }
+        params = IPN_POST_PARAMS.copy()
+        params.update(update)
+
+        self.assertGotSignal(recurring_refunded, False, params)
+
+    def test_refund_for_non_recurring_payment(self):
+        update = {
+            "payment_status": ST_PP_REFUNDED,
+            "reason_code": "refund",
+            "parent_txn_id": "1NK420530S625752Y"
+        }
+        params = IPN_POST_PARAMS.copy()
+        params.update(update)
+
+        self.assertGotSignal(payment_refunded, False, params)
\ No newline at end of file
diff --git a/paypal/standard/models.py b/paypal/standard/models.py
index 7a2cb4d..bb55728 100644
--- a/paypal/standard/models.py
+++ b/paypal/standard/models.py
@@ -14,6 +14,7 @@
 ST_PP_PENDING = 'Pending'
 ST_PP_PROCESSED = 'Processed'
 ST_PP_REFUSED = 'Refused'
+ST_PP_REFUNDED = 'Refunded'
 ST_PP_REVERSED = 'Reversed'
 ST_PP_REWARDED = 'Rewarded'
 ST_PP_UNCLAIMED = 'Unclaimed'
@@ -29,7 +30,7 @@ class PayPalStandardBase(Model):
     # @@@ Might want to add all these one distant day.
     # FLAG_CODE_CHOICES = (
     # PAYMENT_STATUS_CHOICES = "Canceled_ Reversal Completed Denied Expired Failed Pending Processed Refunded Reversed Voided".split()
-    PAYMENT_STATUS_CHOICES = (ST_PP_ACTIVE, ST_PP_CANCELLED, ST_PP_CLEARED, ST_PP_COMPLETED, ST_PP_DENIED, ST_PP_PAID, ST_PP_PENDING, ST_PP_PROCESSED, ST_PP_REFUSED, ST_PP_REVERSED, ST_PP_REWARDED, ST_PP_UNCLAIMED, ST_PP_UNCLEARED)
+    PAYMENT_STATUS_CHOICES = (ST_PP_ACTIVE, ST_PP_CANCELLED, ST_PP_CLEARED, ST_PP_COMPLETED, ST_PP_DENIED, ST_PP_PAID, ST_PP_PENDING, ST_PP_PROCESSED, ST_PP_REFUSED, ST_PP_REFUNDED, ST_PP_REVERSED, ST_PP_REWARDED, ST_PP_UNCLAIMED, ST_PP_UNCLEARED)
     # AUTH_STATUS_CHOICES = "Completed Pending Voided".split()
     # ADDRESS_STATUS_CHOICES = "confirmed unconfirmed".split()
     # PAYER_STATUS_CHOICES = "verified / unverified".split()
@@ -219,6 +220,9 @@ def is_recurring_payment(self):
     
     def is_recurring_cancel(self):
         return self.txn_type == "recurring_payment_profile_cancel"
+
+    def is_refund(self):
+        return self.reason_code == "refund"
     
     def set_flag(self, info, code=None):
         """Sets a flag on the transaction and also sets a reason."""