Overview
The Purchase Return Process (Return to Vendor) is used when materials received from a vendor need to be returned due to quality issues, excess quantity, wrong material, or other reasons. The process typically involves creating a Return Purchase Order (or using movement type 122), posting Goods Issue to the vendor, and creating a Credit Memo.
Prerequisites
- Original Purchase Order and Goods Receipt exist
- Vendor master and material master are properly maintained
- Sufficient stock of the material to be returned
- Authorization for ME21N, MIGO, and MIRO
Method 1: Return with Reference to Purchase Order (Recommended)
1
Create Return Purchase Order (ME21N)
- Go to transaction ME21N
- Select Document Type (usually standard NB or a specific Return PO type if configured)
- Enter the Vendor
- Enter Purchasing Organization, Purchasing Group, and Company Code
- In the item overview, enter the Material and Quantity to be returned
- Important: Set the Returns Item indicator (in item details → Delivery tab or Item category)
- Enter the original Purchase Order as reference if possible
- Enter Plant and Storage Location
- Save the Return Purchase Order and note the number
2
Post Goods Return to Vendor (MIGO)
- Go to transaction MIGO
- Action: Select A01 – Goods Receipt (system treats return as reverse GR) or use Return Delivery
- Better option: Select Return Delivery or directly use Movement Type 122
- Reference: Enter the original Purchase Order or the Return PO
- Movement Type: 122 (Return to Vendor against PO)
- Enter quantity to be returned
- Check Storage Location and Batch (if applicable)
- Post the document
Stock will be reduced and a Material Document will be created.
3
Create Credit Memo (MIRO)
- Go to transaction MIRO
- Select Transaction = Credit Memo
- Enter Invoice Date and Amount (credit amount)
- Enter the original Purchase Order or Return PO number
- System proposes the returned quantities
- Check the amount and tax
- Ensure Balance is zero
- Post the Credit Memo
Vendor liability will be reduced (credit posted to vendor account).
Method 2: Direct Return using Movement Type 122 (Without Return PO)
A
Post Return Delivery Directly in MIGO
- Go to MIGO
- Action: Goods Receipt → Reference: Purchase Order
- Enter the original PO number
- Change Movement Type to 122 (Return Delivery to Vendor)
- Enter the quantity to return
- Post
Then create Credit Memo in MIRO with reference to the original PO.
Quick Process Flow
ME21N (Return PO) → MIGO (Movement 122) → MIRO (Credit Memo)
Important Movement Types
| Movement Type | Description |
|---|---|
| 122 | Return Delivery to Vendor (against PO) |
| 161 | Returns for Purchase Order (from Returns PO) |
| 124 | Return Delivery to Vendor from GR Blocked Stock |
Related Transaction Codes
| T-Code | Description |
|---|---|
| ME21N | Create Return Purchase Order |
| ME22N / ME23N | Change / Display Purchase Order |
| MIGO | Goods Movement (Return to Vendor – MvT 122) |
| MB51 | Material Document List |
| MIRO | Enter Credit Memo |
| MIR4 | Display Invoice / Credit Memo Document |
| MMBE | Stock Overview |
| ME2L / ME2M | Purchase Order reports by Vendor / Material |
Important Notes:
- Always try to reference the original Purchase Order for better tracking and automatic quantity updates.
- Movement Type 122 is the most commonly used for returns against a PO.
- After posting the return, the PO history is updated and open quantity is adjusted.
- Quality inspection can be activated for returns if required.
- Ensure the credit memo amount matches the returned value to keep FI and MM in sync.
Helpful Tips
- Use the Returns Item indicator in the PO when creating a dedicated Return Purchase Order.
- Check stock availability in MMBE before posting the return.
- After MIGO (122), verify the Material Document and stock reduction.
- In MIRO, select Credit Memo as the transaction type (not Invoice).
- You can also create a Return Delivery (Outbound Delivery) and then post Goods Issue if shipping is involved.
- Monitor returns using standard purchasing reports (ME2L, ME2M).