What do you say when someone comes to visit & notices that their gift has been returned?
Obviously for clothes & little things, it's easy enough to say "Oh, its around here somewhere" or "Oh, its in the laundry".
But what about large items like a walker, a bathtub, a highchair...?

Re: Explaining Returned Gifts
This. Would you be able to say that it's at the grandparent's?
I really would not lie about it. If you were that concerned about hurting feelings, you wouldn't have returned that person's gift. It would be pretty awkward to get caught lying about returning a duplicate gift.
What about in laws though?
Let's say your MIL buys a walker. You have no intention of using one, so you return it for store credit & buy something else entirely.
In this case, the duplicates excuse won't work, and it's a big enough item that MIL would notice that it isn't anywhere in sight.
For the sake of argument, let's assume that the MIL is absolutely the type who would ask about it, and be offended upon finding out that it was returned.
how about, "(baby name) wasn't big on using walkers and we really needed ___ so we went and returned it and got ___ instead. and (baby name) really loves it!"
A walker ?
Maybe say it was recalled or that you read they aren't safe ???
I really don't know. That is a tough position to be in.
Well...if you know your MIL is going to make a big deal out of it...then just keep it. Maybe keep it in the box and if she asks about it, then set it up. If not, just wait and then take it back eventually.
I would just say something like, "It was so nice of you to get us the walker, but we were concerned that we might not get as much use out of it as we would (insert whatever you bought instead)."
So is this something that actually happened, or is this whole scenario hypothetical? Are you trying to say that you already returned a walker, and now you are realizing that your MIL may notice? Honestly, if you were concerned about making her feel like you appreciated her gift, you would have held onto it.
But if you already returned it, can't you just tell the truth if she brings it up? Tell her that you didn't plan on using a walker, but were able to exchange it for whatever else you bought with the credit.
I just don't agree with the mentality that you should hold onto something just because it was a gift- especially large items. If you live in a big house with ample room, maybe, but otherwise, why sacrifice valuable storage space for someone else's feelings?
So, I posted this looking for ways of politely explaining myself- without lying, because that's not something I'm willing to do. I really like the approach that you and others have suggested: saying that we hadn't planned to use a walker, and mentioning how useful/fun/whatever the replacement item is.
Who knows, maybe I'll get lucky and she won't say anything at all. I just like to be prepared.
Thank you everyone for your helpful answers!
While I agree you shouldn't have to keep it, I would warn you away from the honesty tactic. When someone hates your gift, their being honest about it doesn't make anything better. Think of it this way--why is the fact that you don't want a walker such an important truth that denying it would be a sin? Isn't respect for the giver's feelings a greater virtue? Extolling the virtues of what you swapped it for is not polite and could really sting. Granted, it shouldn't come up, as no reasonably polite person would inquire. Nevertheless, I would lie, lie, lie--recalled, broken, being borrowed, at your parents' house, whatever. BUT since you won't lie, here is an out for you: do not return it, donate it. Then you can say you knew someone whose need was greater, and just knew she'd do the same thing in your place. Or if your parents do have room, really do keep it there.