Managing the Return Process with Dynamics 365

By Scott Frappier | February 12, 2021

Manufacturers and distributors are able to easily manage the return process with Dynamics 365, no matter how complex your requirements are. In this blog, we’ll run through some common return scenarios that can easily be managed using D365.

Managing Returns in Dynamics 365

E-commerce allows manufacturers to sell their products anywhere in the world, no matter how far from the manufacturing floor. However, this also means that when customers want to return an item, they aren’t always heading to your main location to do so. Dynamics 365 gives you the flexibility to decide how you’re going to manage returns.

  • Do you want to accept in-person returns?
  • Would you like the customer to mail back the item?
  • Do you want to issue a credit or refund without requiring the physical item to be returned to you?

With Dynamics 365, you have the ability to track all items and returns, no matter if they are mailed back to you or dropped off at a satellite location or branch. When the return process is started with D365 Sales, information automatically flows to the Finance module, kicking off the supply chain workflow for returns.

You can set up the system to require any set of reason codes related to the return, whether that be defective, no longer want, received too late, etc. These reason codes then can drive an expectation as to what is going to happen with the product from both a physical restocking perspective and also from a credit, replace, or refund perspective.

Depending on your policies, you may decide the shipping and restocking costs aren’t worth the hassle of accepting returns at all, and instead you’ll simply issue a credit for the item. That process can be tracked in D365 to validate the purchase and verify and issue a credit to your customer.

Defective Items

If an item is defective, you may have policies in place that allow for automatic waivers of restocking fees, not requiring the product to be returned, or additional workflows to determine why the product was defective and if remanufacturing work or revisions should be completed.

Quality management practices allow you to generate a quality work order in D365 that kicks off an inspection process, with the results tied to the return. Options from there can start any rework production orders that enable you to address any ongoing manufacturing issues or provide corrections for the resale of refurbished items.


When a return has occurred, it’s common for customers to have a replacement order. In D365, you can generate that replacement automatically when processing the return and link that data directly to the original order. The system gives you total visibility into whether a return has been generated and fulfilled.

Reselling Refurbished Items

Once an item has been reworked and restocked for sale as a refurbished item, the system calculates the net time and material cost spent on reworking the item and helps calculate an adjusted price for resale based on parameters you have set.

Customer Service

The easier it is for customers or vendors to purchase your products, the more likely they will continue to do business with you. By providing a customer or vendor portal, you empower your customers with self-service capabilities for not only returns, but also new orders, account history, and much more. Customer and vendor portals directly integrate with D365, allowing information to pass seamlessly between solutions. This removes the manual processes of entering an order or return information and updating client profile details like addresses and names from your team and onto the customer, saving you labor hours and costs associated with additional personnel.

Additionally, an integration to FedEx or UPS allows your customers to print return labels from any location and schedule package pickups.

With D365 you can give customers and vendors the convenience they are asking for and expect.


No matter your return management policy, Dynamics 365 provides the functionality to easily process returns, refunds, and replacements.

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