Hello Richard - I would recommend using the Return Order so that they can manage the inventory handling
A Sales Return Order will be created, where they then generate a Warehouse Receipt and subsequent Put-away to process the return goods into the warehouse and post the Credit against the customer's account.
When you say WMS I am assuming that you have Directed Put-away and Pick (DP&P) enabled. That requires warehouse processing to manage the Sales Return quantity. We may need to see the Location Card > Warehouse tab settings just to confirm if you have DP&P enabled. Otherwise, if you have other various selections on the Warehouse tab then this would change the process of troubleshooting.
Please let me know if you have any questions.
