Cannot refund loyalty points.
Query:
If a customer paid the amount of a sale transaction (partially or completely ) using loyalty points and then refunded the sale , the loyalty points did not Roll back using the Loyalty Tender type.
Response /Workaround:
Loyalty Tender type can not be used to refund the Loyalty points.
Loyalty tender type remains to disable while refunding a transaction in which loyalty points have been redeemed.
Loyalty points used will not roll back, however, any monetary refund for such a transaction can be made via other available option for refund,e.g. CASH

The functionality is by product design, this is not a product issue.
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