Returns and damaged goods in a furniture store

A customer returns a sofa bought three days earlier; on another delivery the leg of a coffee table is broken. Both go back into the warehouse and both still show as "available" in the records. A sales assistant sees stock on screen and promises it to a new customer, while the piece sits on the rack scratched or missing a part. If returns and damage are not recorded properly, sellable stock looks larger than it is. This article explains how status codes and a separate rack prevent that.

Where returns and damage come from

There are four sources, and each is resolved differently:

• customer returns: the item was delivered and then came back, and it may have been used;
• delivery damage: harm during transport or installation, where responsibility depends on the contract;
• damage inside the warehouse: caused by stacking, handling or a forklift;
• goods that arrived damaged from the supplier: not noticed at receipt or not posted.

In the fourth group a claim against the supplier or carrier may arise, and that needs photographs and a report; the notification period differs from contract to contract, so note your own from the start. If all four are collected under one "damaged" heading, it later becomes impossible to say who caused how much loss.

Five status codes

The item stays the same; its status changes. In 1C, Excel or your ERP, keep these statuses in a separate field:

1. Sellable: new, undamaged, packaging intact. Only items in this status count as sellable stock.
2. Returned, awaiting inspection: back from the customer, not yet examined.
3. Under repair: a part must be replaced or fixed.
4. Discounted sale: slightly flawed but will be sold; the flaw is written into the record.
5. Supplier claim or scrap: waiting for a claim letter, or decided to be disposed of.

Do not leave the status as a free-text note; make it a field you can filter in the stock list. In Excel, a separate column and a formula that totals sellable stock by that column are enough.

A separate rack and an inspection deadline

Every status needs a physical counterpart. The returns rack and the damage rack stand in a marked area, apart from the sales floor and the normal warehouse addresses. Putting an item back in its old place "for now" makes it look sellable again a few days later.

Put a deadline on inspection: for example, a returned item is checked and its status written within three working days. Keep the form short: order number, reason for return, location of the damage, photograph, decision and the person who made it. The storekeeper should not decide alone; the store manager or sales lead signs, so the question "why did this item go on discount?" has an answer in the record. Hang a label on each item showing the status, the order number and the date, and the counting team can match the rack to the record through that label.

Example: a hidden risk of 12.5 million som

An illustrative case: the record shows 60 "Lara coffee tables" with a unit cost of 2,500,000 som and a selling price of 3,600,000 som. In the count the team finds 54 sound tables on the floor and in the warehouse, 3 on the returns rack and 2 on the damage rack; 1 is missing.

• 54 + 3 + 2 = 59 against 60 in the record, so the genuine difference is 1 unit;
• the 5 returned and damaged tables show as normal stock: 5 × 2,500,000 = 12,500,000 som at cost;
• the sales screen shows 60 sellable tables, yet only 54 have passed inspection.

On inspection 2 of the 3 returned tables are sound and one goes for repair; of the 2 damaged tables, one goes to a supplier claim and the other to discounted sale. Sellable stock becomes 54 + 2 = 56; 56 + 1 + 1 + 1 = 59, and with the missing unit that makes 60. With a 30 per cent discount the selling price is 3,600,000 × 0.70 = 2,520,000 som, only 20,000 som above cost. A discounted sale makes no loss but leaves no profit, and knowing that in advance makes the decision easier.

In short

When returned and damaged furniture is separated from normal stock by a status code, the sellable figure moves closer to reality and a count variance becomes explainable. In store and branch stock audits StockSystem reviews return and damage records, and in furniture and showroom counts it collects damaged goods in a separate list.