Some cases are very clear, like senior members / full members sending 20 to user X and then getting 10 back for a crappy post.
Again, I wouldn't call even these cases "very clear" cases of abuse. It could very easily be the case that these users are using their merit in stupid ways not abusive ways. I'm not saying to avoid taking action against abusers, but to say that something is very clear when it could just be a couple of uninformed users that do not know what constitutes a quality post or do not realize the implications of their merit usage. "Crappy" Post is subjective, and if we're going to keep merit subjective then we need to accept that some users are going to merit posts you believe to be crappy. The hope is that the merit system will dry these people out, as they will be subject to the flow, decay and earning of merit the same as the rest of us. Without a source they cannot do any significant damage.
If the merit exchange is less than 2 points... I would just let it go. Else, just use good judgement.
I think the "good judgement" should come in the form of which posts you merit, not primarily in your crticism of the posts another user chooses to merit. I really believe it might be beneficial to just let them run rampant to some degree, and see what the impact is, because I believe they would run out of merit very quickly, make their alts/circles very obvious, they wouldn't be able to rank up and the system would discourage them much more. I believe catching them and making a manual judgement is only going to serve to allow these abusers to think "if only I hid my abuse better, or did it in smaller chunks I could benefit". We should allow the system to callously render their schemes useless.
Always take into account that once the initial smerit is depleted, even the farmers will need to do good posting to rank up, and that is almost here judging from the graphs that show merit awards declining asymptotically towards a certain value that can be managed by Theymos by creating sources or giving them more merit.
This is where we agree, and sort of the basis for a lot of what I've discussed. Merit distribution is going to be very efficient in a very short period of time. It isn't a perfect system, but I do believe it will get better with time and I also believe it has done a good job of proving that since it's implementation.