Yip, I think that's what is happening. Apparently it's easy to add a new retainer than to increase the space on existing ones.
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Ok, cause I wasnt even thinking like a separate inventory, more of just a list of items you have come across/earned. Like a bestiary. you don't have to capture one to have it and its information listed in your "book" you just have to fight one. But I do agree it would need a separate and new interface. I just hope this would help. I know its my biggest problem. I'm a gear whore, I use my character like a dress up doll and play with gear all the time. I'm afraid to throw anything out for fear it will be the perfect item I need to "get that look".
This is why they need to push stuff like this to the clients. Let us save these settings on our systems, then increasing them won't be such a big issue. We have way too many things being handled server side that could really benefit from this.
This game has a massive amount of item storage compared to any other MMO I've played. The problem is you if you managed to use it all. Too much item storage causes lag and latency.
Make a new character.