The quick answer
Open the original Item Fulfillment and read its GL Impact subtab. Then open the Item Receipt created from the linked Return Authorization and read its GL Impact. For a restocked return of an average-cost item, the amount posted to the Inventory account should match the amount the fulfillment relieved when Use the Exact Cost for Linked Returns is checked on Setup > Accounting > Inventory Costing Preferences. In the example both post 36.00 for three units, while the item's Average Cost is now 16.12, so the return was not valued at the average.
When an average-costed item ships at one cost and comes back after the average has moved, the books can value the returned units in two ways: at the cost the units left at, or at whatever the average is when they return. The difference lands in Inventory and Cost of Goods Sold. This guide reads a return that has already been received and shows where to see which cost it used. It does not show how to authorize or receive a return, and it does not change the setting.
Customer, item, company and person names in the screenshots are fictional example data. Use your own account and values.
Before you start
You need a role that can view the original Item Fulfillment, the return's Item Receipt, the item record and Inventory Costing Preferences. The comparison only means something when a few things are true, so check them first.
The return must be linked to the original sale. The Return Authorization has to have been created from that sale, and the Item Receipt shows it in Created From. A return keyed in by hand for the same customer and item has no original fulfillment cost to reuse.
The item must use average costing. FIFO, LIFO and standard-cost items follow their own rules, so do not read this comparison across to them.
The receipt must have Restock set to Yes. A return that is not restocked is not added to inventory, and its posting follows the non-restock treatment and the configured accounts.
Check Override Rate on the Item Receipt. A populated Override Rate, including one defaulted from the item's Default Return Cost, replaces the calculated return cost, so leave it blank when you want to see the calculated one.
Compare after inventory costing has completed. With scheduled costing, displayed costs and postings can change when a run finishes.
01. Read the original fulfillment's cost
Point to Recent Records at the left of the navigation bar and click the Item Fulfillment, here Item Fulfillment #IF4412. You can also reach it from Related Records on the original sale. On the Items subtab, three units of Harbor Gasket Kit shipped. Open the GL Impact subtab. Cost of Goods Sold is debited 36.00 and the Inventory Asset account is credited 36.00. For three units that is 12.00 each.
02. Read the return's Item Receipt
Point to Recent Records again and click the Item Receipt, here Item Receipt #IR4421. Created From reads Return Authorization #RMA118, which confirms the link, and the Items & Expenses subtab shows three units of Harbor Gasket Kit received to Reno Warehouse with Restock? set to Yes.
Open the GL Impact subtab. The Inventory Asset account is debited 36.00 and the item's Customer Return Variance account is credited 36.00. The Return Authorization itself does not post, so this receipt is where a return's cost lands. The offset goes to the item's Customer Return Variance account when the item has one and can fall back to its Cost of Goods Sold account when it does not.
Compare the two GL Impact subtabs, not a unit rate. The amount the receipt posts to Inventory (36.00) equals the amount the fulfillment relieved (36.00) for the same three units.
03. Compare with the item's Average Cost
Point to Recent Records and click the item, Harbor Gasket Kit. On the Purchasing/Inventory tab, read Average Cost under Item/Cost Detail. It shows 16.12, well above the 12.00 a unit shipped at. Total Quantity On Hand is 17 and Total Value is 274.00. The returned units are already counted in them. A return valued at an average like this could not have posted 36.00 for three units, so the receipt followed the fulfillment and not the average.
Treat the average as context, not as a figure to match. It moves with every later receipt and with the returned units themselves, so it does not have to match either posting. With Multi-Location Inventory the relevant cost can be the location's, and it can lag while scheduled costing is pending.
04. Confirm the preference
Click Setup in the navigation bar, point to Accounting, and click Inventory Costing Preferences. Use the Exact Cost for Linked Returns is checked. Leave the page without saving. This setting is account-wide and decides which cost a qualifying linked return uses, so it is what explains the result you just read.
The check is only as good as the two GL Impact tabs. If the amounts differ, look for an override rate or default return cost, a partial quantity, a different location's cost, a missing link, a cleared box, or a recalculation of the original fulfillment, and test one controlled return before you change anything.
Common questions
What does Use the Exact Cost for Linked Returns do?
When it is checked, a qualifying return that is linked to the original sale is generally valued at the cost of the linked original fulfillment, rather than at the cost that applies where and when the return is received. It is an account-level preference on Setup > Accounting > Inventory Costing Preferences.
Does it apply to returns that are not linked to the original sale?
No. The Return Authorization has to have been created from the original sale. A stand-alone return has no original fulfillment cost to reuse, so NetSuite calculates a cost for it.
What happens if the box is cleared?
NetSuite generally uses a calculated return cost, which for an average-cost item is often the average cost at the return location. Location, costing history, inventory detail, an override or a default return cost can change that, so test it in your account. This walkthrough does not show a cleared box.
Why does the Item Receipt credit Customer Return Variance and not Cost of Goods Sold?
A restocked receipt debits the Inventory asset account and credits the item's Customer Return Variance account when the item has one, and NetSuite can fall back to the item's Cost of Goods Sold account when it does not. The item's accounting setup decides that, not the preference.
Will the return always match the number I saw on the fulfillment the day it shipped?
Not necessarily. The return follows the cost currently assigned to its linked fulfillment. If costing later recalculates that fulfillment, for example because a receipt or adjustment with the same date is processed ahead of it, the return can follow the revised figure. Read the fulfillment's GL Impact now, not from memory.
Why doesn't the item's Average Cost match either posting?
The average is recalculated from the stock on hand, by location where Multi-Location Inventory applies, including later receipts and the returned units themselves. It can differ from the cost one shipment left at, as 16.12 does from 12.00 here, so treat it as context for the comparison and not as a target.
Does this work for FIFO, LIFO, standard-cost, lot or serial items?
Do not assume so. FIFO and LIFO items follow their layer rules, standard-cost items follow standard costing, and partial returns, serial items and lot items need their own tests.
Is it safe to change the setting?
It is a policy change for every qualifying linked return from then on. Have accounting approve it, test one controlled return first, and reconcile Inventory, Cost of Goods Sold and Customer Return Variance afterwards. A change to the setting does not ordinarily rewrite receipts that are already saved, but editing historical transactions or running a costing correction can recost history.