Lance Perkins, from Pembroke, Ontario, said he was "very pleased" by the decision.
According to Perkins, his son, who is 17, did not realise he was making the purchases on FIFA, a popular football game. In total, the bill came to $8,206 (£5.734).
"I hope we have warned enough people," Perkins told CBC News. "This is not just a game when it can upset a whole family and endanger our children with making mistakes."
The credit card company was unhelpful, according to Perkins, and so it fell to Microsoft to issue a refund.
According to CBC News, the son thought he was making a one-time purchase and was unaware that he had, in fact, racked up a bill of $8,000. "He thought it was a one-time fee for the game," said Perkins. "He's just as sick as I am."
Microsoft initially refused to refund the money, but Perkins explained his son was a minor and it relented, according to CBC News.