Need to intercept inventory adjustment for return

[bsanders1979]

I have created an Item Status of "Scrapped" for a return item. When it
is selected, the customer will be issued a refund and the item will be
adjusted back into inventory. I was wondering if anyone can point to
where I could intercept the adjustment so that it does not occur. I'm
looking in the log, but I'm having some difficulty pinpointing it
myself. I will continue to investigate while I wait for responses.
Thanks.