We have recently stopped auto adjustment of inventories on order cancellation by taking into consideration overselling issues for our users. 

There are two types of cancelled orders:

  1. Buyer Cancelled Orders
  2. Orders Cancelled by Seller

The seller generally cancels an order or allows the SLA to be breached in the following two cases:

  1. The product is damaged
  2. The product isn't available (has been sold through other channels)

Seller cancelled orders also lead to marketplace penalties and a negative impact on the account health. Hence, if we re-adjust the inventory for these orders, it will lead to Out of stock orders for that product leading to further marketplace penalties and deterioration of account health, this cycle will continue until the stock is replenished or the SKU is deactivated on the marketplace. It can also lead to suspension of the account.

Hence, we have stopped adjusting inventory for cancelled orders. We are also trying to identify the type of cancellation and when we succeed in distinguishing the buyer and seller cancelled orders, we will adjust inventory for buyer cancelled orders and not do it for the seller cancelled ones.