There is a refund notation available for credits but not one for paying a refund to a cestomer who has paid twice in error
Any idea on how to handle without just deleting it all
do you need to actually refund the payment or are you just trying to record the transaction in waves?
I think that you could just delete the payment and re-add the right amount if the latter, or add a negative value to the invoice or negative income txn to record this.
Changing payments create confusion so a better method is needed like contra posting credits to debits?
If you got the payment in your bank account twice, you'll need to account for it.
You could just categorize it as Refund for Income, and choose the same category you choose for the second payment. Everything will balance out and your transactions will match your bank statements, @Mark Swords