I interpreted "refund of the excess purchase" to mean that it is a refund of the whole purchase. If it were a partial refund, they could have just written "refund of the excess".

By adding "purchase", they made it sound to me like there are two categories of purchases (excess and non-excess) and that this purchase belongs to the excess category. That is, I saw "excess" as an adjective that says why the refund is happening, not how much is being refunded.

The more I analyze the wording, the less I'm sure which interpretation is right.

The last statement of the post mentions how he will not get any return. But he's only going to be refunded the excess.

So ultimately, did he, or will he still make his $850, as initially intended?

She didn’t have a completely incorrect mental model. But the credit card company is being a lot more lenient than the government is being and the government should be more strict.