Damaged and Defective Merchandise Handling SOP

Standard procedure for identifying, segregating, coding, documenting, and disposing of damaged or defective merchandise so it is not resold and inventory loss is recorded accurately.

Steps

• Identify the damaged or defective item
  The Quality Inspector visually inspects the item against the documented acceptance criteria, identifies the defect type (for example, scratch, dent, breakage, contamination, or functional failure), and records the exact location and visible condition in the non-conformance log within 15 minutes of discovery.
• Segregate the item from saleable inventory
  The Warehouse Associate removes the item from pick faces, shelves, or outbound staging and places it in the designated quarantine or hold area using the approved damaged goods label or quarantine tag.
• Apply the non-conformance code and hold status
  The Inventory Control Specialist updates the inventory management system, scans the item barcode, and applies the correct non-conformance code and hold status so the item cannot be picked for sale.
• Document the condition and quantity
  The Quality Inspector records the item identifier, quantity affected, visible condition, date, location, and supporting photo evidence in the non-conformance record and confirms the count matches the physical item.
• Notify the supervisor or quality owner
  The Quality Inspector notifies the Shift Supervisor or Quality Owner, shares the non-conformance record and photo evidence, and requests review of the next disposition path.
• Determine the disposition path
  The Shift Supervisor reviews the defect type, condition, and policy requirements, then selects the correct disposition path for return, repair, claim, disposal, or write-off.
• Process the return, repair, or claim
  The Returns Processor completes the approved return authorization, repair ticket, or warranty claim in the inventory management system and keeps the item blocked from resale until the workflow is closed.
• Arrange approved disposal or write-off
  The Inventory Control Specialist or Shift Supervisor completes the disposal log or write-off record, uses only the approved disposal method or vendor, and confirms the item is removed from active inventory.
• Close the record and confirm inventory accuracy
  The Inventory Control Specialist verifies that the final disposition is recorded, confirms the inventory balance matches the physical item count, and closes the non-conformance record for audit purposes.