Geoff, I have heard both ways. Recently a marker was found in a cemetery in the county next to me.
After some research we found that the grave the marker was set at was wrong. The man buried there never served, but someone found a name close to his and ordered the headstone from the VA. Thru a lot of back ground research the mistake was uncovered. The VA was contacted and they said to return the marker. There are some SCV Camps that will take a marker, that is incorrect, and sand the inscription off and reuse the marker. Which right or wrong, saves the VA money and time.
There is a marker close by that had the mans unit information wrong. It had 26th Ga. Inf. and should have been the 6th Alabama Cav. In order to save the VA money, and the SCV time and money, someone just left the inscription, took the marker to a local monument shop, had the correct information inscribed on the reverse side, turned the marker the correct side facing the grave. All is well.
But I was told the reason they wanted them back was they wanted to keep track of markers. (physical location, veterans name, etc.) Now if that does not hold true today, can't they just donate the marker to a local SCV Camp to reuse, as long as that camp furnishes them with the new location, and new inscription??