In order for a package or refund credit to be able to be used as payment for a session the following must hold. Work through the following to resolve:
The session must have the relevant package type (bundles, passes and/or memberships) selected as an accepted Payment method. Edit the session to check and update as needed.
The session must have the same tag as the relevant package. You can check the set tag for the bundle/pass/membership in Packages > click on package name from appropriate filter > review table in Details page. Edit the session on the Schedule page to check and update the tag as needed.
The package must have Sessions set as a purchasable object. Edit the bundle/pass/membership from Packages > click on package name from appropriate filter > Edit this package to update as needed.
The session must be within the package's Validity period i.e the date and time of the session must be before the package's expiry date.
The package must have outstanding credits on it. If a customer was expecting refund credit(s) issued back to their original package or a separate 1 credit auto-refund bundle issued and hasn't, then you can easily check whether their cancellation triggered your auto-refund policy by following the steps in this article.
The package must have Prevent use with sub-profiles unticked to allow main account holders to book their sub-profile(s) onto a session using this package as payment.
If the refund package was gifted by an auto-refund policy, you may want to confirm whether the policy is configured to gift the correct package.
It may also be worth checking that the customer is logged into the account that has the live package on it when booking onto a session.