Rewards are conditional on the underlying transaction standing.
WITHIN THE HOLDING PERIOD
If the order is refunded before rewards clear, the pending rewards are removed. Nothing is taken from your other balance; the rewards simply never became available.
AFTER CLEARING
Where the rules provide for it, cleared rewards may be reversed if the underlying payment is refunded or charged back.
IF YOU HAVE ALREADY REDEEMED THEM
The rules set out what happens. Typically the account balance is adjusted, which may leave a balance owing if the redeemed value has already been applied.
WHY THIS EXISTS
A programme returning value on revenue that is subsequently refunded would be paying out on transactions that never happened. Every loyalty programme works this way.
WHAT IT MEANS PRACTICALLY
For ordinary customers paying invoices for services they keep, this never arises.
It arises where an order is cancelled within a money-back period, or where a payment is disputed. If you are considering a refund on a recent order, expect the associated rewards to be adjusted.