I work for Home Depot, though I’m speaking purely for myself, and not in any official capacity.

Customer service desk folks are indeed trained to use good judgement and Home Depot employees are empowered (to use an overused term) to do what it takes to make a customer happy. They can’t give away the store, of course, but they’re supposed to take into account the customer experience and factor in the value of keeping a customer against the dollar write off, just as you recommend.

I’m pretty certain if the store manager had been within earshot, he or she would have stepped in and refunded the customer’s money without further question and sincerely thanked him for his business.

But it’s hard to train good judgement.