How to record merchandise returns that can be trashed or donated?

I'm here to help you record that, wyatt121. 

When invoices you send in QuickBooks become uncollectible, you need to record them as a bad debt and write them off. This ensures your accounts receivable and net income stay up-to-date.   

We'll create a bad debt expense account first for the bad debt item.

1. From the Accounting menu, select Chart of Accounts.
2. Click New at the upper-right.
3. Select Expenses as the account type and Bad debts for the detail type. 
4. In the Name field, enter “Bad debts.”
5. Select Save and Close.

Create a credit memo for the bad debt

1. Select + New and click Credit memo. 
2. Choose and select the customer from the Customer ▼ drop-down.
3. In the Product/Service section, select +Add new and create a Bad debts non-inventory item. Select the bad debts account under Income account. Click Save.  
4. Enter the amount and then click Save and Close.

Apply the credit memo to the invoice

1. Select + New again and click Receive payment. Select the appropriate customer. 
2. From the Outstanding Transactions section, select the invoice.
3. Check the credit memo under the Credits section. 
4. Select Save and Close.

The uncollectible receivable now appears on your Profit and Loss report under the Bad Debts expense account.   

I'm just around the corner if you need anything else. Take care!

@wyatt121 

You can donate the t-shirt, but there is no value to the business in doing so, the cost was already accounted for.

Create a non inventory item called return-noitem, set the expense account on the item screen to a discount account (it should be a sales discount income account, but if you already have a discount expense account use that)

On the customer credit, use that item enter the amount as a positive