Who's absorbing the cost?

These were the shops that would open an LP for you and play it and/or inspect it

That must have been way back, when staff actually possessed the knowledge of what to look for.

I think this is one reason companies adopt certain policies and procedures - it eliminates the need train their staff.

From the postings above it would seem that some companies - probably the smaller ones - are prepared to refund on damaged products in order to keep their customers, whereas the large companies, like HMV simply adopt a policy that keeps the money in their coffers.

Corporate greed rears it’s ugly head yet again :-(

Randy-11: disputing the charge is one avenue, but it lacks awareness on HMV’s part. After all, it’s just one of their bean-counters that deals with disputes

The primary reason for the OP was to keep the people that actually buy vinyl informed about their policy and practices.

And just perhaps, someone from HMV will get to read this thread?

We all live in hope:-)

Regards...

That must have been way back, when staff actually possessed the knowledge of what to look for.

That's right. These were people who loved and lived vinyl.

I honestly don't recall returning that many records due to defects back in the day- I'm sure they existed and I'm sure I returned some. I had "serious" gear starting in 1973 or so, and I'm confident that if a record didn't play or track well, I wouldn't have been happy. But, I also think a couple things have happened- the quality of the mainstream pressings went down, as the market was near zero for a while, and the "audiophile" labels filled the gap for many of us, or classical or jazz collectibles. At that point, we (or at least I) was buying used for the most part- so the standards changed in what to look for and expect. I also think our expectations are higher- folks who stuck with vinyl as a medium got more knowledgeable, and I suspect those who came back to it had greater expectations for quiet, gremlin free playback. I also bought a lot more vinyl after The Death of Vinyl (tm) than I did when it was in its heyday - so, in addition to used, old or cut-out copies as a factor, I'm simply seeing more copies come through with whatever degree of warts they suffer from. 
I've also had few problems with returns etc in current times (e.g. the last ten years). I buy far fewer brand new records than old ones, but when there is a defect in a new record, i return it. From a private seller, there is almost always a refund- eBay or Discogs. From the "usual" suspects, e.g. Music Direct, Acoustic Sounds, they have been pretty accommodating  in the instances where I have had an issue. I don't really have a problem taking a credit rather than a refund since it is likely that I'll wind up buying another record along the way. 
I assume the policy of credit rather than refund is simple economics for the business. Assuming they can't return the defective pressing in most cases, the retailer "eats" it, but wants to retain the profit from the sale to the extent the remedy they offer is a replacement or a credit for a different record. That costs them less (since they are paying a wholesale or lower price) than the full retail price of the record. 
I'm not suggesting a defeatist attitude, or "that's the way things are"- but I don't get that twisted about any of this- I go through a lot of records. My main concern is the pricey rare stuff. If that isn't up to snuff, grade wise, I will be disappointed, but that's rarely happened. It isn't just luck. I engage the seller before I buy in communications via their website or the aggregation platform, get a sense of their knowledge and how critical they are- for an expensive record, I'll often want play grading, but even that is subjective. Yeah, I've had some M- records that weren't really close to mint, but I've also had VG+ or EX that are superb. And every once in a while, I will get a rare pressing, and one that appears to have never been played. So, it all evens out for me in the end. 

@whart
Very true about there being few defects in the "golden era" of vinyl records. I only remember problems when they were manufacturing those ultra-thin LPs that could warp, or music would bleed thru grooves. There was also a period of using inferior quality vinyl, (1980’s, I think).

As for new vinyl, look at the many threads regarding defects.

Low- oil crisis stuff was pretty bad in the U.S., but most of them still played. I have an original SOS label pressing of Lynyrd Skynyrd "Pronounced" with paper flecks embedded into the vinyl from regrind, but it still plays nicely. Go figure. (I did discover that a ubiquitous MCA later pressing, with no discernible "secret" code actually sounded better than the Sounds of the South labelled one, but the SOS is cool, just for what it was). Al Kooper ’n s---. :)