Not defending fraud (in general or in this specific case), but who it being ruined for?
Amazon is still making fabulous amounts of money, prices are still low there, and the policy is still generous to the customer.
Unless the friend is only buying Amazon-branded products, the merchant is being screwed
It's the reason Amazon is getting more and more strict on such returns. Legitimate users are punished.
In my view it hurts the suppliers who are trying to do business through Amazon. It also hurts other customers, since it reinforces the idea that you can ship stuff with unknown or intermittent quality, and let the return process serve as your quality control.
You would like the Stainless Steel Rat scifi series of books by Harry Harrison. :)