This is crazy, if Costco lets the guy return his belt, in exchange for another size, where is the harm in that? Costco's return policy lets you do that, so the poor guy isn't breaking any laws or violating any codes of ethics except for your own ethical code, which is aparently flawless.
Guy's droppin lb's like crazy, give him a break.

BTW I return stuff all the time, sometimes without a reciept. I once returned a sportcoat after wearing it to a wedding because I decided I didn't like it. I am a human knife cutting through the fabric of decent society I guess.