In actual fact not all returned items are sold as new, some are not fit at least not in my store, and some opened items haven't been used but simply viewed by the customer in store although that was generally stopped with covid, I agree some returned items are not properly checked and repacked and it is an issue and I can see why it puts some people off, I personally think they need to change the returns policy but on the other hand it may alienate more than they loose the other way.
I do not think it right that a mains powered item is checked over by staff in an Argos inside Sainsbury's and they decide it is okay to be re-sold. IF they sent every single item away to be properly checked, tested and reboxed (with new manuals and packaging, like a white or brown box) then fine - especially if the product is given a slight discount. Obviously something returned shouldn't be binned if it works, but there's no way to determine whether something was returned simply because someone didn't like it, or because they broke it.
Years ago, I bought a vacuum cleaner from Makro that caught fire instantly when turned on (something arced inside and a load of fluff ignited). Fortunately the fire burned itself out, but it turned out to be quite well used and this was the first time I realised such practices occurred. Once bitten (or burned), twice shy.
I expected Argos to apologise for me being sold something used, but I was told in no uncertain terms that they can re-sell returned items as new and the member of staff talked to me like I was a POS (and also took my mobile from me to get information before agreeing to give a refund - despite me saying that with Covid, I was perfectly able to read the necessary information to him myself).
If there's a different process, it's clearly not being adhered to. Maybe local managers work to different (unofficial) rules but it matters not to the consumer.
Anyway, I've said my piece. There are many other examples online of people having the same issue, and if Sainsbury's doesn't address this somehow then I am sure it will cost them.
Oh, one more thing; Another thing that caught me out (again, never again) is buying something from the toy aisle two aisles away from the in-store Argos and discovering it was almost £10 cheaper from Argos. Yes, Sainsbury's and Argos pricing isn't matched. That's fine if they really do want to operate separately, but people need to be aware that this really is a thing when you're in the exact same building and possibly a matter of metres away from the identical item. Again, Sainsbury's has a standard text to quote to anyone that complains.