How to handle damaged goods from a supplier

Separate good stock from damaged stock first

When a shipment arrives, count what is actually sellable before you touch your inventory records. Put damaged units aside physically so they do not get mixed back into stock that staff might pick for orders.

Receive only the usable quantity

Receive the good units against the purchase order as normal, including partial receiving if the rest is still in transit or being replaced. Do not receive the damaged units as if they are sellable stock, even temporarily, because that overstates what you can ship.

Track the damaged units outside the PO flow

Log the damaged quantity, the reason, and photos if you have them, in a simple note or spreadsheet tied to that purchase order and supplier. This is your record for any credit, replacement, or dispute, and it also tells you if a supplier has a pattern of damage worth raising with them directly.

Decide on credit, replacement, or write-off

Contact the supplier with your damage record and agree on a credit note, a replacement shipment, or a refund. Once you know the outcome, adjust your inventory accordingly: add stock if a replacement arrives, or leave it excluded if you are getting a credit instead of more units.

Step by step

1. Count and separate damaged units from good units on arrival.
2. Receive only the good quantity into Shopify, using partial receiving if needed.
3. Photograph and log the damaged units with quantity, reason, and PO reference.
4. Contact the supplier with the damage record and request credit or replacement.
5. Hold the damaged units aside until the supplier issue is resolved.
6. Adjust inventory once a replacement arrives or write off the loss if you get a credit instead.
7. Note repeat damage issues against that supplier for future ordering decisions.

Worked example

A store orders 100 units of a candle from a supplier. The box arrives with 92 good units and 8 crushed ones. The store receives 92 units into Shopify against the purchase order, logs the 8 damaged units with photos, and emails the supplier for a credit. The supplier agrees to credit the cost of 8 units on the next invoice, so the store does not add those 8 units to stock at all, it just closes the PO at 92 received.

How SteadyShelf helps

SteadyShelf supports partial receiving, so you can receive just the good units from a shipment and leave the rest off your books. It does not have a dedicated damage, lot, or claims log, so you will need to track damaged quantities and supplier credit conversations in a separate note or spreadsheet.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related guides

• How to handle inventory shrinkage
• How to handle long lead time products
• How to handle one big order that skews your forecast
• How to handle carryover stock between seasons

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