In light of some of the spectacularly over-the-top responses in this
thread, I guess I'll also throw in what I know.  I freely admit that, while
I was a hardcore Tower junkie for years, over the past couple of years I
have generally stopped buying from them as their selection continues to
diminish and prices go up.  So the information that I relate below, while
I still have a lot of faith in its accuracy, I do not know what might have
changed since I was last on top of this.

I have visited a large number of the Tower stores in the US (over three
dozen of them - Dalls not being one of them), and being a mega-customer,
I have had the chance to get to know casually several classical section and
store managers in places like Berkeley, L.A., Chicago, D.C., etc.  Without
getting specific, I'll just say that I was told a fairly consistent story
by multiple sources.

The story goes like this.  In the late 80s Tower corporate was either
seriously considering, or had already decided on, plans to begin buying
and selling used CDs.  When the "majors" got wind of this, they immediately
threatened to withdraw all advertising subsidies.  A these subsidies from
the labels amount to big bucks, Tower came back with a counter-proposal.
It has always been a policy for labels to accept a limited number of
returns at the wholesale level for a variety of fairly obvious reasons.
But in the 80s CD quality was still relatively poor with defective returns
as high as one or two percent.  Tower had a yearly squabble with the majors
on this excessive return stock, so they had an interest in streamlining the
process.  As I understand it, the result of this was that Tower agreed to
table plans for used CDs and in return the majors allowed Tower to return
stock without questions.  A consequence of this was the Tower policy that
they will take back a CD in exchange for another, even if it's opened.
This has been a long-standing policy at the more than three dozen stores
coast-to-coast I visited over the years.  It has *not* been widely made
known, and I think that makes a lot of sense too, though it is printed
on the receipts and can be found posted behind most counters.

It may well be that things have changed radically, or that the arrangement
between Tower and the labels had a time limit (10 years perhaps?).  This
was the first that I'd heard about Tower getting into the used CD business,
though I see they now list it at their web site.  I can tell you my
experience with this has been absolutely consistent since circa 1990.
So the bottom line is that it is the label who pays most when you make a
return at Tower (assuming things have not changed).  Obviously Tower also
has stocking/restocking costs and other overhead, so a return costs them
too.  How much more money Tower and the labels make because of the goodwill
and experimentation engendered by this policy, I can't say.

Whether all this makes business sense, I'll leave that to the businessmen
involved.  It certainly is not the responsibility of the consumer to feel
guilty for using a service freely offered by the store, as long as that use
is within stated policy, whatever that policy may be.

Dave
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