Thanks for this and not blaming my knuckle dragging flat billed hat wearing wife

This is exactly what happens.
My wife did say she likes the new lost prevention guy. Previous guy was as worthless as management. The new guy told her, anything she sees that is questionable, call him and he'll come take care of it.
No problem, but in fairness, I haven't met your wife.
The problem stems from "good customer service".
Back in the day, this stuff was far less common. Maybe it is partially because (some of) the public had more responsibility for their actions.
Now, the public knows that retailers will treat you with kid gloves to prerserve their customer service image and they take advantage of it. When a retail shopping ahole doesn't get his/her way, they throw a fit in the store like a 2 year old and/or spread their hate online damaging the reputation of the retailer.
It doesn't work the other way either. Remember that 2 waitresses were recently fired for posting what "customers" (aholes) put on their receipts. Those "customers" should have been banned for life and ridiculed before the wait staff was terminated.
The people at the bottom end of the retail worker wage pool really have no control and are stuck making the best of a bad situation. If that hourly employee works with management that almost always caves to the "customer", then there is no point in saying "no" to one of those aholes because the manager will make you look like a fool when the ahole gets his/her way anyways.
"Customers" bring back used, damaged, substituted (return water for paint), stolen and parts missing stuff all the time. The store doesn't want to RTV it (Return to Vendor) because full credit isn't always given, resulting in a markdown. The store just can't toss the item without accounting for the inventory value (wholesale or retail price- depends on the store and their accounting practices). The returns cashier won't always catch sneaky customers that return a box with missing parts or the 2' piece of pipe that was returned and the "customer" got their full price back.
The person restocking the items may not have time to inspect each item either. Or, the department is at the markdown value limit and more stuff can't be tossed until next month/quarter. Either way, it goes back on the shelf. If it was good enough to take back, I sure in the hell ain't marking it down- that markdown stuff is scrutinized and I have to log into my user name to do it. If the retailer truly wanted fresh appearing product on the shelves instead of looking like a rummage sale, no "less than perfect" returned merchandise would enter the department returned items bins/carts for restock.
Those special aholes that rummage through an unopened box and then take an unopened one don't help either. I understand the need to inspect it, but take the one you opened, jerk.
In any event, we all pay for it in the form of higher prices, more outsourcing to preserve margins or the hit on profit on Wall Street.
The people that have never held a retail job do not know how bad it really is.