I hope stores limit returns, especially when active Covid-19 hits their community, because you don't know who sneezed all over that 45-pack of TP.
Also, as DaveNW points out, it's going to really slow down the return line. Plus where are they going to put fairly bulky stuff like TP? Dave, does that stuff go back onto the floor, or do they have to send it somewhere?
And finally, because it will thwart resellers, and teach us all a little discipline for next time.
Returned items have to each go through an inventory audit process. Each return gets a barcoded sticker that is scanned and compared to current inventory. If the item is "resellable," it will go out on the floor, if possible, to be sold. If not resellable, or is not a currently stocked item, or whatever else, they need to decide how to deal with it. Generally, with current inventory items, if an item can be safely restocked, it goes out on the floor, if there is room. In normal times, that might include TP or paper towels. If it's been opened, or is not safe to restock, (like any fresh foods, or fruit, or bread, and whatever else not in a can), or is not a current inventory item, it is either Returned to the Vendor (RTV), or is disposed of. I'm sure Costco refusing refunds on panic-shopped items this time around is as much about sheer volume, as it is the inability to know how that item was handled. What sort of contamination has that product been through, and how can Costco guarantee it wasn't in a hotbed of Covid-19 infection? Simply put, they can't. So refusing returns on this sort of thing is for Member safety.
It happens often that a Refund Cashier gives back someone huge $$ for returned Tri-Tip steaks and similar, then turns around and drops it directly in the garbage can. The Member freaks out and says, "Why did you do that? There's nothing wrong with it!" And the Refunder says, "Because we have no idea where it's been, or how it's been kept. Would YOU want to buy returned meat that may have been sitting in the back window of someone's car in the sun for two days, then chilled in the fridge before returning it to Costco? Yeah, neither would anybody else. It's all about your safety." So the Member says, "Well, if I'd known you were just going to throw it away I'd have kept it." And the Refunder replies, "Think about that the next time you want to return something like that. This is what happens to it." This sort of thing happens all too often.
If there is a problem, by all means, return the item, and make sure Costco is fully aware of the problem. But if you're doing it out of vanity, carelessness, or outright selfishness, please don't.
Dave