I was a Gamestop employee like four years ago, and we used to lean REALLY HARD on the 7 day refund on used games as an excuse to sell people used stuff. (Edit: we'd push customers to buy even new releases used, if available, and NEVER cut anybody off. We billed it as "the perks of buying used, since you have 7 days to decide if you like it")
Obviously it gets customers back in the store at least once a week, for one, but once a game is no longer "new," they pretty much stop caring about it because any time it's bought or sold back is pure profit. That's why they can give discounts with the edge card or do buy-two-get-one-frees. We had a bunch of old PS2 sports game discs in envelopes sitting by the register, 50 cents each (no box, no terrible generic boxart).