i suppose it depends on the scale of damage, and whether or not you need the item in the near future, i lent a tent out once, it came back sopping wet, stuffed in a black bin bag because despite my showing them how to fold it up they couldn't be bothered. now it wasn't a very good tent, and was showing a bit of wear, so i went out and bought a new tent, and left the old one in the black bin bag so when they asked to borrow it again (which they did) i could just had it to them, needless to say it had got a little bit mildewy but hey thats life. they never asked to borrow from me again, especially after they complained about the state of the tent and i pointed out that that was how it was returned to me(by them).
tis simple. lend something out if it gets broken and its not valuable, keep it and use to lend out in future, if its expensive, point this out at the begining, and make sure that they understand that if it comes back in bits they had better flash the palstic.
or don't lend out stuff.
best
steve