Earlier quoted context omitted.
Some people do abuse this to rip companies off, to varying degrees; I know some people who treat returns as free rentals, buying something, using it without ever intending to keep it, and then returning it. Some people go even further and steal things and then return them for cash. But I guess that on the whole, the good customer experience for the honest customers outweighs the cost of fraud.
EDIT: My apologies. It looks like I'll need to have a discussion with my friend about this.
Why would a company want you to do that?! The only reason some allow it is that it's very difficult to have a policy that allows honest customers to return items they don't like (for whatever reasons) while at the same time preventing this behavior.
You'll find that there are many companies who have stopped the practice of accepting returns for any reason, for the very reason you stated. If you were running a product company, would you enjoy and encourage the "free rental" behavior?