Best Practice (Good)
Track un-saleable merchandise with a bar-coded label. Any merchandise that is not saleable and cannot be discarded is usually stored according to vendor guidelines. While some vendors simply require an inventory report to issue credits, others will send a sales representative to inspect the goods or to ship to the vendor.
Typical Practice (Bad)
Store returned, unsaleable merchandise in a designated area in the warehouse to await being scrapped.
Benefits: A complete audit trail consisting of return reason, date of initial shipment, date of return, customer name, etc. will assure legitimacy of the claim and improve supplier relationships.