diff --git a/t/db_dependent/Circulation/ReturnClaims.t b/t/db_dependent/Circulation/ReturnClaims.t
index 2bb2a5c437..e1b4409f6e 100755
--- a/t/db_dependent/Circulation/ReturnClaims.t
+++ b/t/db_dependent/Circulation/ReturnClaims.t
@@ -17,7 +17,7 @@
 
 use Modern::Perl;
 
-use Test::More tests => 4;
+use Test::More tests => 5;
 use Test::MockModule;
 use Test::Warn;
 
@@ -143,6 +143,46 @@ subtest 'Test Koha::Checkout::claim_returned, mark as returned' => sub {
     is( $checkout2->id, $checkout->id, "Checkout was found in the old_issues table");
 };
 
+subtest 'Test Koha::Checkout::claim_returned, should refund a previous lost fee if refund_lost_fee is set' => sub {
+    plan tests => 4;
+
+    t::lib::Mocks::mock_preference( 'ClaimReturnedLostValue',  1 );
+    t::lib::Mocks::mock_preference( 'MarkLostItemsAsReturned', q{claim_returned} );
+    my $item       = $builder->build_sample_item;
+    my $itemnumber = $item->itemnumber;
+    my $patron     = $builder->build_object( { class => 'Koha::Patrons' } );
+    my $checkout   = AddIssue( $patron, $item->barcode );
+
+    my $line = Koha::Account::Line->new(
+        {
+            borrowernumber    => $patron->borrowernumber,
+            itemnumber        => $itemnumber,
+            debit_type_code   => "LOST",
+            status            => "NULL",
+            amount            => 10,
+            amountoutstanding => 10,
+            interface         => 'commandline',
+        }
+    )->store;
+
+    my $claim = $checkout->claim_returned(
+        {
+            created_by      => $patron->borrowernumber,
+            notes           => "Test note",
+            refund_lost_fee => 1
+        }
+    );
+
+    my $updated_line = Koha::Account::Lines->find( { accountlines_id => $line->accountlines_id } );
+    is( $updated_line->amountoutstanding + 0, 0,       "Line amount outstanding is 0" );
+    is( $updated_line->status,                'FOUND', "Line has been struck off as 'FOUND'" );
+
+    my $credit =
+        Koha::Account::Lines->find( { borrowernumber => $patron->borrowernumber, credit_type_code => 'LOST_FOUND' } );
+    is( $credit->amount + 0,  -10,                      "Credit amount is 10" );
+    is( $credit->description, "Item found $itemnumber", "Credit has been marked as relating to the item being found" );
+};
+
 subtest 'Test Koha::Checkout::claim_returned should not update the itemlost status if it is already set' => sub {
     plan tests => 2;
 
diff --git a/t/db_dependent/api/v1/return_claims.t b/t/db_dependent/api/v1/return_claims.t
index a79dd9e73f..a151cee26d 100755
--- a/t/db_dependent/api/v1/return_claims.t
+++ b/t/db_dependent/api/v1/return_claims.t
@@ -72,6 +72,7 @@ subtest 'claim_returned() tests' => sub {
         "//$userid:$password@/api/v1/return_claims" => json => {
             item_id         => $item->itemnumber,
             charge_lost_fee => Mojo::JSON->false,
+            refund_lost_fee => Mojo::JSON->false,
             created_by      => $librarian->id,
             notes           => "This is a test note."
         }
@@ -88,6 +89,7 @@ subtest 'claim_returned() tests' => sub {
             "//$userid:$password@/api/v1/return_claims" => json => {
                 item_id         => $item->itemnumber,
                 charge_lost_fee => Mojo::JSON->false,
+                refund_lost_fee => Mojo::JSON->false,
                 created_by      => $librarian->id,
                 notes           => "This is a test note."
             }
@@ -101,6 +103,7 @@ subtest 'claim_returned() tests' => sub {
         "//$userid:$password@/api/v1/return_claims" => json => {
             item_id         => $item->itemnumber,
             charge_lost_fee => Mojo::JSON->false,
+            refund_lost_fee => Mojo::JSON->false,
             created_by      => $librarian->id,
             notes           => "This is a test note."
         }