If an item goes lost, it is charged to the patron. If the item is returned without paying, the charge is removed, but the line item in the patron account shows it as "Lost item fee refund". No payment took place. Unless a payment took place, this should read "Lost item fee removed".
Maybe 'Lost item fee cancelled' could also work here.
(In reply to Katrin Fischer from comment #1) > Maybe 'Lost item fee cancelled' could also work here. Agreed.