I would leave all the money in and hand it straight in at either the Police Station, the bank or the University. You never know what someones' circumstances are and what they need to pay for.
Taking any amount without the cardholder's consent is theft, pure and simple. They may have left the card in the ATM for some reason, and they would absolutely be at fault for that, but unless given express permission you don't have authority to access their accounts or their funds. Regardless of how much was in the account or who it was if you have a lot to pay for or an inflexible budget then even that £30 or £20 going missing can potentially make your life very difficult.
Generic you there, by the way. Not referring to anyone in particular.
But yeah, that's my input. Merchant was very disrespectful and greedy to take any amount from the cardholder.
Edit: if it were just a £10 note on the floor then that's just bad luck and a semi-expensive lesson depending on your circumstances. Unless I saw the guy drop it I wouldn't have any way of handing it back. I did find a £20 note on the ground once, I figure some guy must've pulled his hands out of his pocket and pulled that with him. It's unfortunate but I did keep that since there was nobody to claim it.