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This all took effect about two years ago - Target asks for your DL and keeps a tab on your non-receipt exchanges. It's all because people were abusing the system and returning things not purchased at Target. In Europe, you cannot return anything anywhere without a receipt and most stores won't accept a receipt older than 30 days. I think in the US Walmart is the only store that has not tightened their return policy yet.
Some of my friends like to use Home Depot or Lowe's as a rental place - they buy a tool, use it fo a day and then return it because they may never need that tool again. I think it's a little unfair and I can see how stores may end up accepting returns for store credit only one day.
Target is awful for returns. They've had this policy for years and it sucks! It is frustrating when people don't give gift receipts, but I admit I often forget to give a gift receipt so I can't get too frustrated.
The thing that gets me is store credit would have been fine...that was all I wanted. Thankfully Bed Bath & Beyond took the items back no problem. Seriously though...it was an unopened munchkin wipe warmer and organizer thing...like they wouldn't be able to resell those..and I exchanged an unopened green moby for a black one. We are talking about maybe $95 dollars tops.