Staff should not do it, or allow it, for fraud prevention reasons. (ie it is quite common for people who have stolen cards buy goods/services one them and to then seek refunds to a different credit card or bank account etc when this happen the business/store bares the loss and not the issuing bank).
I certainly 100% refuse anyone who asks my business to refund to a different card (which most of the time are quite literally Nigerians).
However having said that if you have used a non-reloadable card/ gift card/e-voucher the business has to refund bya different means. At Woolworths this has normally been cash in hand, though they have also given me a new gift card to the amount of the owed amount.
