You can debit their account for the merchant credit as the credit you gave the customer was final and made the customer whole. They are not entitled to also receive the merchant credit - that is now the bank's money. If the customer has any complaints just explain to them that you are entitled to the money and if they keep it, you will sue them for unjust enrichment. Regarding the fact that the merchant credited their account twice - you can ask the customer, but if they do not agree to return the second credit, then this is something between them and the merchant that I would not step into the middle of......
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