In this paper we investigate if handheld augmented reality, in the form of an application running on a mainstream smartphone, can serve as a practical and effective tool for inventory tasks. Taking magazine retail as an example, we have applied a user-centered design process to research, design, implement and evaluate a handheld AR application prototype. We conducted a qualitative user study at magazine retail stores, where staff responsible for magazines were interviewed (n=8) and their primary magazine handling tasks observed. After an analysis of the study findings, we selected a key task as the basis for the design, implementation and test of an AR app prototype. The task consisted of collecting and registering a list of magazines for return to the distributor. We evaluated the AR app prototype in a user study (n=22), where participants used it to perform the selected task. They also performed the task using the paper list currently in use, and a second, simplified app prototype, without AR features. Task performance was measured based on time and error rate. The participant’s subjective experience was also captured in the form of a post-task survey and interview. Our findings suggest that handheld AR can prove effective when used for specific, focused tasks, rather than more open-ended ones.