For exchanges, Rich Returns allows store owners to either create a (real) order in Shopify or a draft order. The draft order option does not reserve inventory for the new item until it is converted to a real order in Shopify.

The option in Shopify's dashboard to Reserve items will NOT reserve inventory according to merchant reports in the Shopify forums, see example here.

Shopify does not natively support the functionality of reserving items for draft orders to developers, yet. However, you can use our Out-of-Stock feature to reserve inventory. Read more on that here.