Thinking about it, if you've received the item using the warehouse module, the last time I tried, you could not Correct the product receipt. You might be able to Cancel it, but this will reverse the entire receipt, which is far from ideal.
Last time I had to think about Vendor returns in combination with the Warehouse module was in R3, and what I found then was, it didn't matter what you did after you had received the items.... there is no good way to un-receive them. Which lead me to the conclusion that, once you have received something, you are going to invoice it, and the only way to deal with a return is to post a credit note. Whether you create a new Return PO, or add a negative line to the existing PO is up to you, but in standard, there's no way round this.
