diff --git a/README.txt b/README.txt
index 4bcd004..638d513 100644
--- a/README.txt
+++ b/README.txt
@@ -61,6 +61,17 @@ admin/commerce/config/stock/validation
 and
 admin/commerce/config/stock/control
 
+Increase stock level when canceling an order
+============================================
+If you want stock to be automatically returned when an order is canceled you can
+enable the "Stock: Increase when canceling the order process" rule on the "stock
+control" configuration page.
+This will handle orders with a state change
+from: Pending, Processing or Completed
+to: Canceled
+you can easily update this to include other states that are relevant to your
+site.
+
 Decimal Stock
 =============
 The editing of stock levels support decimal quantities, to enable this feature
diff --git a/modules/commerce_ss/commerce_ss.rules_defaults.inc b/modules/commerce_ss/commerce_ss.rules_defaults.inc
index 6649a9c..f982da1 100644
--- a/modules/commerce_ss/commerce_ss.rules_defaults.inc
+++ b/modules/commerce_ss/commerce_ss.rules_defaults.inc
@@ -31,5 +31,40 @@ function commerce_ss_default_rules_configuration() {
 
   $rules['rules_decrement_stock_completing_order'] = rules_import($rules_export);
 
+  $rules_export ='{ "rules_increment_stock_canceling_order" : {
+      "LABEL" : "Stock: Increase when canceling the order process",
+      "PLUGIN" : "reaction rule",
+      "ACTIVE" : false,
+      "TAGS" : [ "stock_control" ],
+      "REQUIRES" : [ "rules", "commerce_ss", "entity" ],
+      "ON" : [ "commerce_order_update" ],
+      "IF" : [
+        { "data_is" : { "data" : [ "commerce-order:status" ], "value" : "canceled" } },
+        { "data_is" : {
+            "data" : [ "commerce-order-unchanged:status" ],
+            "op" : "IN",
+            "value" : { "value" : {
+                "pending" : "pending",
+                "processing" : "processing",
+                "completed" : "completed"
+              }
+            }
+          }
+        }
+      ],
+      "DO" : [
+        { "LOOP" : {
+            "USING" : { "list" : [ "commerce-order:commerce-line-items" ] },
+            "ITEM" : { "list_item" : "Current list item" },
+            "DO" : [
+              { "commerce_ss_increase_by_line_item" : { "commerce_line_item" : [ "list-item" ] } }
+            ]
+          }
+        }
+      ]
+    }
+  }';
+  $rules['rules_increment_stock_canceling_order'] = rules_import($rules_export);
+
   return $rules;
 }