A person takes an item in the store and then presents it to get a credit. This is one of the most common scams that target retailers.
You have this nice policy above, now watch it abused.
In my experience, here are three common scenarios.
1) The person has no documentation, like this guy here.
2) A customer purchased the product. They give, use or often find a receipt often thrown out in the rubbish bin by the purchaser. Now someone comes into the stop with the receipt. They take the same product from the shelf and then request a refund.
For this reason, receipts should always be put in the packaging of the purchased item.
3) People fake your receipts to return stolen goods for cash refunds. It is easy to do with a smart camera and some image editing software.
To stop this you need
a) A good return policy
b) A POS System that can track sales. Always look up the item sale into the POS System to verify the original sale.
c) You need a good security camera.