I have set up receipt in 3 steps, as described in the documentation. The docs describe how to accept purchased product into inventory, but not how to reject and return product.  This is all it says:

Of course, you may change the quantity and only transfer to stock the quantity that is valid and decide that you will return the quantity that is not good.

I believe the process should work like this:

1. Process the receipt (move from Partner Locations/Vendors to WH/Input

2. Transfer the product to the quality zone (move from WH/Input to WH/Quality Control)

3. Return product to vendor (move from WH/Quality Control to Partner Locations/Vendors)

4. Create a Refund Invoice (like in Vendor Bills)

I tried the Return button on the delivery order (Reverse button in v9), but, it only allows me to return the product to WH/Input.  Checking the To Refund box seems to have no effect.

It was suggested in another post, that a refund could be created from the delivery order, but I see no way to do that, and it doesn't happen automatically.

Return button on Delivery Order:

Return Location list and To Refund checkbox on reverse transfer: