Damaged Goods Returns: A Simple Process for Wholesalers

Damaged goods returns are easiest to handle at the counter. When the driver and the retailer check the goods together, the damaged quantity can be refused, photographed and left off the bill, so there is nothing to return later. Damage found after delivery should be raised as a claim on that order with photos, settled under a written policy, and corrected through the proper accounting route, usually a credit note. Throughout, keep stock records honest by writing damaged goods off with a reason.

For an FMCG wholesaler, some damage is unavoidable: a carton crushed at the bottom of the van, oil leaking from one pouch onto the rest, biscuits broken in a monsoon pothole. What is avoidable is the long argument that follows when nobody recorded anything.

Where damage happens

Stage	Typical damage	Who should catch it
Godown storage	Moisture, rodents, crushed stacks	Godown staff during packing
Packing	Wrong stacking, heavy items on light ones	Packer
Transit	Crushed cartons, leaks, breakage	Driver at unloading
At the shop	Damage found when the carton is opened	Retailer, reported quickly

The earlier the damage is caught, the cheaper it is to fix. A carton rejected at the godown costs you nothing in disputes.

A damaged goods returns process in five steps

1. Prevent what you can

• Stack heavy items at the bottom and liquids upright.
• Keep fragile and leaky items in separate crates.
• Do not overload vans to save a trip.
• Check stock condition during packing, not just quantity.

2. Check at the counter

The driver and retailer open or inspect cartons together before the driver leaves. If something is damaged, the retailer refuses that quantity and the driver records the accepted quantity per item, with a photo of the damage.

3. Bill only what was accepted

If the invoice is created on delivery, it simply leaves out the refused quantity. No return, no correction. This is the single biggest advantage of catching damage at the counter.

4. Handle later claims fairly

Some damage only shows when a carton is opened days later. For these:

• Ask the retailer to report within a fixed time, such as 24 or 48 hours.
• Ask for photos and the batch or pack details.
• Decide by your written policy: replace, take back or give a credit.
• Keep the conversation linked to the order, not scattered across calls.

5. Correct the books

• Billing. If goods are taken back after a tax invoice was issued, the usual route is a credit note linked to the original invoice. Credit notes have time limits, generally by 30 November after the end of the financial year, or the annual return date if earlier (at the time of writing — check with your CA).
• Khata. Reduce the retailer's dues by the agreed amount, with a clear note.
• Stock. Damaged goods that cannot be sold should be removed from stock with a reason, so your count stays right. If the damage happened before you received the goods, raise it with your own supplier.

Writing a damaged goods returns policy

A one-page policy, shared with every retailer, prevents most disputes. Include:

Point	Example wording
Check at delivery	"Please check goods before the driver leaves."
Reporting window	"Damage found later must be reported within 48 hours with photos."
Proof needed	"Photo of the item and the outer carton."
Remedy	"Replacement on the next delivery or adjustment in your khata."
Exclusions	"Damage due to storage at the shop is not covered."

Keep the tone fair. Retailers who feel the policy protects them too are more willing to check carefully at the counter.

Training drivers to handle damage

Drivers are your front line. A short briefing helps them handle damage calmly:

• Do not argue at the counter. Record what the retailer refuses and let the office handle the rest.
• Photograph before moving anything. A photo of the damaged carton in the van or at the shop is more useful than one taken later.
• Bring refused goods back. Do not leave damaged goods "for now"; they become a dispute about quantity.
• Report patterns. If the same item is damaged on every trip, tell the dispatch team so packing can change.

Expired goods are a different case

Damaged and expired goods are often lumped together, but they are handled differently. Expiry returns depend on brand and distributor schemes and on how close to expiry the goods were supplied. Our article on expiry management covers that side.

Damaged goods returns checklist

• Packing rules to prevent damage written and followed.
• Driver and retailer check goods together at delivery.
• Refused quantity recorded per item, with photo.
• Invoice and khata based on accepted quantities.
• Reporting window and proof requirements for later claims.
• Credit notes for returns after billing, as advised by your CA.
• Damaged stock removed from inventory with a reason.
• Monthly review of which items and routes see the most damage.

How MaalMitra helps

MaalMitra keeps the evidence and the follow-up attached to the order.

• Accepted quantity at the counter. In the driver app, the driver records what the retailer actually accepted for each item, and confirms delivery by entering the retailer's delivery OTP, with photo and signature as extra proof.
• No billing for refused goods. The GST tax invoice is created on delivery for delivered quantities only, and the same amount goes to the khata.
• Disputes on the order. If damage is found later, the retailer raises a dispute on that order with the type "damaged item". Both sides exchange messages in the app, the status is tracked, and a dispute can be escalated to the platform admin.
• Stock write-off with a reason. Wholesalers can remove damaged goods from inventory with a reason, and every movement is kept in the stock movement log.

Wholesalers can add a credit-note entry to the retailer's khata to reduce dues, but MaalMitra does not produce a GST credit note document linked to the invoice, so issue that as your CA advises.

For a deeper look at handling disagreements, read our guide to order disputes. For partly accepted orders in general, see partial delivery.

The bottom line

The best damaged goods returns process is the one that rarely needs a return. Pack carefully, check together at the counter, bill only what was accepted, and handle later claims with photos and a written policy. Keep the books honest with the right corrections and stock write-offs.

Want damage caught and recorded at the counter? Get started free with MaalMitra.