RETURN AND ALLOCATIONS

I don't work in shipping but I had a shipping question brought up to me. We have a customer that placed a rather large order. They notified us that they made a mistake and ordered too much of one item. To avoid a ton of work, I did a return of just the one item. I did the return towards the lot number on the invoice. This is my normal procedure. I don't know what normally happens from that point in the shipping department but they're saying that they can't unallocate the item from the order. When I look at the item in inventory I can see that x amount is allocated. How do we unallocate it?