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While returning a transfer in the Inventory module, the wizard defaults to showing the destination location as the return location. However, as shown in the attached images, the destination location is set to PEIWH/Main Warehouse, but when I process the return, it shows PEIWH/RMA Delivery as the return location instead. why this is happening? 


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The return location defaults to source location of the inventory operation, however this can be changed in the event it is being returned to a different location.

From the screenshot it seems like a return of a receipt operation so would believe by default the return location would be Partner/vendor.

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