You can use this window to set up codes that specify the reasons for returning items. These can be items that a customer returns to you or items that you return to a vendor.
The Return Reason Code field appears in the Sales Return Order and Purchase Return Order windows.
In addition to setting up the return reasons code and its description, you can also specify a special location code where returned items are always placed. You can fill in the Default Location Code field with that location code to indicate, for example, that the returned items belong to the customer and should not affect the availability and value of your inventory.
Irrespective of where you place a returned item, you can decide with the Inventory Value Zero field how to treat the value of the returned items.
Inventory Value Zero field is checked:
This option is practical when the returned item needs rework before it can be returned to the customer. The item can then enter into inventory to be repaired but its value will be set to zero. When the item is later resold to the customer, the only cost associated to the item could be the cost of the rework/ repair (including shipping costs etc.) made on it. Another reason could simply be that you want to take a defective item back into inventory but not include it in the inventory value.
Inventory Value Zero field is not checked:
With this option the item gets returned to inventory at its original cost, for example, if the item has no defects and is ready to be resold.