Processing returns

Overview

Returns are items coming back into your warehouse after they have been shipped. WMS handles returns as an inbound movement into dedicated locations — this keeps returned stock clearly separated from sellable inventory until it has been inspected and a decision made.

Common return reasons include:

• Change of mind
• Wrong item shipped
• Damaged in transit
• Failed delivery (return to sender)

From a WMS perspective, all returns share the same core questions:

1. Where should the returned item go first?
2. Is it re-sellable, damaged, or under investigation?
3. Should it be restocked, scrapped, or held in quarantine?
4. How should inventory be adjusted for a clean audit trail?

Setting up return locations

Before you start processing returns, make sure you have dedicated locations configured for returned stock. See Locations and warehouse setup for how to create locations.

Recommended location types for returns:

Location type	Use
Returns	General holding area for items coming back from customers. First stop for all returned goods before inspection.
Quarantine	Items under investigation — quality issues, recalls, supplier claims.
Damaged	Items confirmed as unsellable, pending write-off or disposal.
Quality Control	Items being inspected, repaired or refurbished.

Using dedicated locations ensures returned stock is never accidentally allocated to a new order before it has been inspected.

Receiving a return

Returns are handled like an inbound receipt but without the need for a purchase order.

Quick returns

Use this when you want to log everything quickly and sort the details later:

1. Find a suitable Returns or Quarantine location.
2. Perform a stock adjustment (positive) to receive the returned item into that location.
3. Record the SKU, quantity, and for tracked products, the batch or serial number.
4. Note the original order or RMA reference in the adjustment reason or notes.

Detailed returns

Use this when you want to make a restocking or write-off decision at the time of receipt:

1. Receive the item into the appropriate location based on your initial inspection:
   • Re-sellable → Returns location for verification, then move to normal stock.
   • Clearly damaged → Damaged location.
   • Unclear → Quarantine for further investigation.
2. Record all required details (SKU, quantity, batch/serial where applicable).
3. Follow the appropriate next steps below.

Returns for batch and serial tracked products

For tracked products, always capture the correct batch or serial when receiving the return. This preserves traceability — the returned unit can be linked to the original shipment via movement logs, and if re-shelved, the batch or serial becomes available again for future allocation.

After inspection: what to do with the stock

Restocking re-sellable items

1. Confirm the item is in sellable condition (packaging intact, correct SKU, no damage).
2. Create a stock movement or use the move stock workflow to transfer the item from the Returns location to a normal Pick Face or Bulk Storage location.
3. The item is now back in available stock and can be allocated to future orders.

Writing off damaged or unsellable items

1. Move the item to the Damaged location if not already there.
2. Create a negative stock adjustment from the Damaged location with a reason such as "Returned damaged" or "Scrap".
3. Physically dispose of the item according to your internal policies.

Holding items in quarantine

1. Move the item to the Quarantine location while the investigation is in progress.
2. Resolve the issue (quality check, supplier claim, etc.).
3. Once resolved, either restock or write off based on the outcome.

Rework and refurbishment

If the item can be repaired or reboxed before restocking:

1. Move it to a Quality Control or Rework location while work is in progress.
2. Once completed, move the refurbished item into a normal stock location.
3. If any components were consumed or scrapped during rework, record adjustments accordingly.

Best practices

• Never put returned items directly into sellable locations. Always route them through a Returns or Quarantine location first, so they cannot be picked for new orders until inspected.
• Capture order references. Record the original order number or RMA code when receiving returns. This links the return to the shipment in movement logs and supports customer service investigations.
• Be consistent with reason codes. Standardise adjustment reasons for write-offs (Damage, Return to supplier, Scrap, etc.) so you can report on return costs over time.
• Count Returns and Damaged locations in your stocktakes. These locations hold real inventory with real value. Include them in your cycle count plan.

Related guides

• Stock integrity and adjustments
• Inventory dashboard and stock visibility