Canada Tracking service "items"

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Our regular business is product based.

We are now getting involved in a service or repair based operation. The entry for the repair of an item is ok

My question
What is the best way to deal with a repair / exchange?
The customer sends in an item that will not be repaired. They will receive a "new" replacement item which is a standard purchase and resell operation.

how do I enter the damaged item?
It is not an inventory item, not a sale, shipped to the manufacturer and not returning to me or the customer.
I would like to track it.
 

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