Correction to Joeblob: Gamestop actually does BOTH.
1.) Gamestop uses the ACTUAL CASES for display for new games. This is called "gutting". They gut 1 or 2 of the new games (usually more than one when the game is very popular such as God of War 2 so a customer sees another display case on the wall and knows the game is in stock) to display.
Many times customers would think they were getting a used game as we were putting the gutted game in the case. This is why we then began to note to the customer everytime "they are getting the display game, it's still new, but was taken out of the case for display purposes, is this ok?" Then the customer decides whether they want to purchase it.
2.) Gamestop also utilizes artwork advertising in generic DVD cases on their isle display shelves for specific marketing advertising on theme sales and such. These display cases provide multiple artwork/cases for a game that may or may not be in stock. Many a time a customer would bring the case up and we would have to explain to the customer the game is not in stock. This could also potentially cause issues with the customer as they expect a game to be in stock when it's being advertised (even though there's fine print indicated the contrary that product may not be available.)
As for the buying back stolen games, the first post was correct, as confirmed by our own District Manager and Manager, that if there's no way to prove that the games are stolen, then you shouldn't refuse to buy the games back.
However, if a customer would return again more than once in a week or something, and was bringing in wrapped brand new games, the manager would then recommend to refuse to buy the games. This however, was a severe grey area, because Gamestop promotes based on not only reservation/subscription performance, but also used trade in performance. Therefore it's in the best interest of the manager and his/her store to get as many used trade in's a possible because this is how Gamestop makes their real money. There's too much overhead on new games to really make a profit unless they're selling MASSIVE AMOUNTS of them (hence the reason why the force reservations on customers). With used games, they pay very little for the trade in and are able to sell the used game back and a marked up price with no money to little going back to the manufacturer of the game (not sure if there's royalty fees worked out within deals with the manufacturers of the games). This is the true profit.
There might have been something else going on here, but it's not surprising to me, and sad at the same time, that Gamestop is not standing behind their employees. For one, they practice and promote a cult-like environment for those that perform the best in pushing reserves and subs on customers, and get the most trades. This leads to many with no ethical or less scrupulous demeanors to make their way to the top of the food chain. Blind eyes are turned to inventory losses and such so long as the store is performing, unless of course they get caught in some big screwup where then management will come down hard and cut the cancer out completely that they helped to grow in the first place.