Even when it was Babbage's we opened the display copy of a given console game, and when we'd sell that copy (which was rare unless we were trying to sell through a discontinued item) we'd seal it in shrink wrap and tell the customer, but still treat it as new. (Babbage's didn't deal in used games until after I left in '94 or so, so we really didn't have a provision for discounting like that). The other copies of the game were in their full boxes behind the counter. Customers were generally OK with that, because it's not like the carts were being heavily pounded on before they were sold, and 95 times out of 100 if you were buying a game it was the brand new copy anyway, at least if you were buying a game for a current system.
If we wanted to try a game we had to use the copy that was already opened, and we had to be on the ball about not saving anything to the carts, not that that was generally a problem (this was back in the days where you generally typed in a code to get back to a given point in the game.)
For PC games, we could take them home for demo and re-shrink them to our hearts' content, with two exceptions: 1) if the box had a security seal, or 2) if the disks came in a sealed envelope inside the box. Then it was hands off. Returned games were re-shrinked and sold as new, unless they had one of the aforementioned security seals (or the materials had visible wear or something was missing), then it was returned to the manufacturer. Babbage's had such a liberal return policy at the time this was pretty much the only real way they wouldn't completely lose their shirt on returns - you could buy a $50 game, wait a few months, bring it back with the receipt, and get the $50 back, even though by then it was $15 or $10 and we were putting it back on the shelf at that price.