diff --git a/src/cache/inmemory/__tests__/__snapshots__/policies.ts.snap b/src/cache/inmemory/__tests__/__snapshots__/policies.ts.snap
index 296372a0cd1..ec9b573d8df 100644
--- a/src/cache/inmemory/__tests__/__snapshots__/policies.ts.snap
+++ b/src/cache/inmemory/__tests__/__snapshots__/policies.ts.snap
@@ -1211,6 +1211,86 @@ Object {
 }
 `;
 
+exports[`type policies field policies custom finalize functions are called if merge function returns undefined 1`] = `
+Object {
+  "ROOT_QUERY": Object {
+    "__typename": "Query",
+    "todoList": Object {
+      "__ref": "ToDoList:{}",
+    },
+  },
+  "Task:{\\"taskID\\":1}": Object {
+    "__typename": "Task",
+    "taskID": 1,
+    "text": "task #1",
+  },
+  "Task:{\\"taskID\\":2}": Object {
+    "__typename": "Task",
+    "taskID": 2,
+    "text": "task #2",
+  },
+  "ToDoList:{}": Object {
+    "__typename": "ToDoList",
+    "tasks": Array [
+      Object {
+        "__ref": "Task:{\\"taskID\\":1}",
+      },
+      Object {
+        "__ref": "Task:{\\"taskID\\":2}",
+      },
+    ],
+  },
+}
+`;
+
+exports[`type policies field policies custom finalize functions are called if merge function returns undefined 2`] = `
+Object {
+  "ROOT_QUERY": Object {
+    "__typename": "Query",
+    "todoList": Object {
+      "__ref": "ToDoList:{}",
+    },
+  },
+  "Task:{\\"taskID\\":1}": Object {
+    "__typename": "Task",
+    "taskID": 1,
+    "text": "task #1",
+  },
+  "Task:{\\"taskID\\":2}": Object {
+    "__typename": "Task",
+    "taskID": 2,
+    "text": "task #2",
+  },
+  "Task:{\\"taskID\\":3}": Object {
+    "__typename": "Task",
+    "taskID": 3,
+    "text": "task #3",
+  },
+  "Task:{\\"taskID\\":4}": Object {
+    "__typename": "Task",
+    "taskID": 4,
+    "text": "task #4",
+  },
+  "ToDoList:{}": Object {
+    "__typename": "ToDoList",
+    "tasks": Array [
+      Object {
+        "__ref": "Task:{\\"taskID\\":1}",
+      },
+      Object {
+        "__ref": "Task:{\\"taskID\\":2}",
+      },
+      Object {
+        "__ref": "Task:{\\"taskID\\":3}",
+      },
+      Object {
+        "__ref": "Task:{\\"taskID\\":4}",
+      },
+    ],
+  },
+}
+`;
+
 exports[`type policies field policies read, merge, and modify functions can access options.storage 1`] = `
 Object {
   "ROOT_QUERY": Object {
diff --git a/src/cache/inmemory/__tests__/policies.ts b/src/cache/inmemory/__tests__/policies.ts
index 9d6f739b599..69916c4447c 100644
--- a/src/cache/inmemory/__tests__/policies.ts
+++ b/src/cache/inmemory/__tests__/policies.ts
@@ -1824,6 +1824,104 @@ describe("type policies", function () {
           },
         });
       });
+
+      itAsync("are called if merge function returns undefined", resolve => {
+        const cache = new InMemoryCache({
+          typePolicies: {
+            ToDoList: {
+              keyFields: [],
+              fields: {
+                tasks: {
+                  keyArgs: false,
+
+                  merge(existing: number[] | undefined, incoming: number[], { args }) {
+                    if (args && args.deleteOnMerge) return;
+                    return existing ? [
+                      ...existing,
+                      ...incoming,
+                    ] : incoming;
+                  },
+
+                  finalize(existing) {
+                    expect(existing).toEqual([
+                      { __ref: 'Task:{"taskID":1}' },
+                      { __ref: 'Task:{"taskID":2}' },
+                      { __ref: 'Task:{"taskID":3}' },
+                      { __ref: 'Task:{"taskID":4}' },
+                    ]);
+                    // Finish the test (success).
+                    resolve();
+                  },
+                },
+              },
+            },
+
+            Task: {
+              keyFields: ["taskID"],
+            },
+          },
+        });
+
+        const query = gql`
+          query {
+            todoList {
+              tasks {
+                taskID
+                text
+              }
+            }
+          }
+        `;
+
+        cache.writeQuery({
+          query,
+          data: {
+            todoList: {
+              __typename: "ToDoList",
+              tasks: [
+                { __typename: "Task", taskID: 1, text: "task #1" },
+                { __typename: "Task", taskID: 2, text: "task #2" },
+              ],
+            },
+          },
+        });
+
+        expect(cache.extract()).toMatchSnapshot();
+
+        cache.writeQuery({
+          query,
+          data: {
+            todoList: {
+              __typename: "ToDoList",
+              tasks: [
+                { __typename: "Task", taskID: 3, text: "task #3" },
+                { __typename: "Task", taskID: 4, text: "task #4" },
+              ],
+            },
+          },
+        });
+
+        expect(cache.extract()).toMatchSnapshot();
+
+        cache.writeQuery({
+          query: gql`
+            query {
+              todoList {
+                tasks(deleteOnMerge: true) {
+                  taskID
+                  text
+                }
+              }
+            }
+          `,
+          data: {
+            todoList: {
+              __typename: "ToDoList",
+              tasks: [],
+            },
+          },
+        });
+      });
     });
 
     it("merge functions can deduplicate items using readField", function () {
diff --git a/src/cache/inmemory/entityStore.ts b/src/cache/inmemory/entityStore.ts
index 7c8ae0e1b3d..cb4fd90bf0d 100644
--- a/src/cache/inmemory/entityStore.ts
+++ b/src/cache/inmemory/entityStore.ts
@@ -233,7 +233,19 @@ export abstract class EntityStore implements NormalizedCache {
         // restrict our attention to the incoming fields, since those are the
         // top-level fields that might have changed.
         Object.keys(incoming).forEach(storeFieldName => {
-          walk(existing[storeFieldName], incoming[storeFieldName]);
+          const eChild = existing[storeFieldName];
+          const iChild = incoming[storeFieldName];
+
+          walk(eChild, iChild);
+
+          if (iChild === void 0) {
+            this.policies.finalizeField(
+              existing.__typename,
+              existing,
+              storeFieldName,
+              context,
+            );
+          }
         });
       }
     }
@@ -608,12 +620,19 @@ class CacheGroup {
     }
   }
 
+  // This WeakMap maps every non-normalized object reference contained by the
+  // store to the path of that object within the enclosing entity object. This
+  // information is collected by the assignPaths method after every store.merge,
+  // so store.data should never contain any un-pathed objects. As a reminder,
+  // these object references are handled immutably from here on, so the objects
+  // should not move around in a way that invalidates these paths. This path
+  // information is useful in the getStorage method, below.
   private paths = new WeakMap<object, (string | number)[]>();
+
   public assignPaths(dataId: string, merged: StoreObject) {
     const paths = this.paths;
     const path: (string | number)[] = [dataId];
 
-    // TODO
     function assign(this: void, obj: StoreValue) {
       if (Array.isArray(obj)) {
         obj.forEach(handleChild);