You're stealing from a store by getting money/credit back from an item that they can no longer re-sell or get their cost back from when you return crap like that. Return policies are for people that legitimately have a problem with something, not an open invitation to take what you want. That's pretty greedy.
Not to mention... yeah, it's possible to swap a HDD inside the casing but you have to have the new HDD flashed with the specific system files, which either means you're going to invest a bunch of time trying to find the right programs, etc on your pc to do it AND buy the cable for it (meaning, more money), OR you're going to spend a bunch of money to send it to someone so that they can flash it.
Instead why don't you either A) buy a genuine xbox 120gb HDD off of ebay (I just bought my second brand new Xbox Starter kit for $60) or just buy an empty HDD case for like 6 bucks and THEN spend the extra cash it's going to cost to get that specific harddrive and cabling.
Retail. I work there. And have for a very very long time sad to say.