If God is merciful, Why didn't God have mercy on the devil?

That's a thoughtful question.
Somethings that we should be keeping in mind are that, in the Bible, we don't have so much details about the fall of Satan, but it is clear that he fell because of his pride and evil desire to make himself equal to God.
God does punish him - and not only him, but sin is punished by God or will be punished by God, when it is committed. That's because God is just. At the same time, we need to keep in mind that punishment was never necessarily the end. We see David being punished after he committed adultery, but David eventually turns back to God instead of rebelling against God. Israel as a nation was punished multiple times, but was also forgiven when ever they turned back to Him. Punishment was not always the end of the road if people were willing to repent.
In the case of Satan, we don't find any details about him repenting. On the other hand, after his fall, we see him going into more rebellion by trying to lead God's creation into sin. At least from the details that we have, it looks more like the pride of devil was so much that he rejects the mercy of God at every point, than God not willing to show mercy.
Again, this is just a possibility, along with many others as the Bible doesn't state much on this matter. Do read the article for some more info on the question. Thank you.