diff --git a/.github/workflows/ci.yml b/.github/workflows/ci.yml
index 07dc030..1bd7cfa 100644
--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -3,9 +3,14 @@ name: CI
 on:
   push:
     branches: [ main ]
+    tags:
+      - 'v*'
   pull_request:
     branches: [ main ]
 
+permissions:
+  contents: read
+
 jobs:
   quality-gates:
     runs-on: ubuntu-latest
@@ -49,8 +54,10 @@ jobs:
 
   release:
     needs: quality-gates
-    if: github.event_name == 'push' && github.ref == 'refs/heads/main'
+    if: github.event_name == 'push' && startsWith(github.ref, 'refs/tags/') && github.repository == 'IndexGrid/offline-first-sync-queue'
     runs-on: ubuntu-latest
+    permissions:
+      contents: write
     steps:
       - uses: actions/checkout@v4
       - name: Create Release Draft
diff --git a/apps/web/src/lib/sync/__tests__/runner.test.ts b/apps/web/src/lib/sync/__tests__/runner.test.ts
index 23ced91..1a0bfb1 100644
--- a/apps/web/src/lib/sync/__tests__/runner.test.ts
+++ b/apps/web/src/lib/sync/__tests__/runner.test.ts
@@ -159,4 +159,77 @@ describe('runSyncOnce', () => {
     const recoveredItem = await db.get('syncQueue', '1');
     expect(recoveredItem?.status).toBe('SYNCED');
   });
+
+  it('should transition to DEAD_LETTER after max retries', async () => {
+    const db = await getDB();
+    const now = Date.now();
+    
+    const tx = db.transaction('syncQueue', 'readwrite');
+    await tx.objectStore('syncQueue').add({
+      id: '1',
+      externalId: 'ext-dead',
+      entityType: 'order',
+      status: 'PENDING',
+      nextAttemptAt: now - 1000,
+      createdAt: now - 2000,
+      payload: { data: 'fail' },
+      url: 'v1/pos/sync',
+      method: 'POST',
+      op: 'UPSERT',
+      retryCount: 10 // Max retries reached
+    });
+    await tx.done;
+
+    const mockFetch = vi.fn().mockResolvedValue({
+      ok: true,
+      json: () => Promise.resolve({
+        results: [{ externalId: 'ext-dead', status: 'error', reason: 'permanent_fail' }]
+      })
+    });
+
+    const result = await runSyncOnce({
+      batchSize: 10,
+      fetchImpl: mockFetch as unknown as typeof fetch,
+      maxRetries: 10
+    });
+
+    expect(result.dead).toBe(1);
+    
+    const item = await db.get('syncQueue', '1');
+    expect(item?.status).toBe('DEAD_LETTER');
+    expect(item?.lastError).toBe('permanent_fail');
+  });
+
+  it('should handle network errors with exponential backoff', async () => {
+    const db = await getDB();
+    const now = Date.now();
+    
+    const tx = db.transaction('syncQueue', 'readwrite');
+    await tx.objectStore('syncQueue').add({
+      id: '1',
+      externalId: 'ext-net',
+      entityType: 'order',
+      status: 'PENDING',
+      nextAttemptAt: now - 1000,
+      createdAt: now - 2000,
+      payload: { data: 'net' },
+      url: 'v1/pos/sync',
+      method: 'POST',
+      op: 'UPSERT',
+      retryCount: 0
+    });
+    await tx.done;
+
+    const mockFetch = vi.fn().mockRejectedValue(new Error('Network timeout'));
+
+    await runSyncOnce({
+      batchSize: 10,
+      fetchImpl: mockFetch as unknown as typeof fetch
+    });
+
+    const item = await db.get('syncQueue', '1');
+    expect(item?.status).toBe('RETRYABLE_ERROR');
+    expect(item?.retryCount).toBe(1);
+    expect(item?.nextAttemptAt).toBeGreaterThan(now);
+  });
 });