question about "no return" policy

It was Christmas eve, I went to a gift store and picked up some gifts for my kids. After I checked out, and before I left the store, my kids told me that there was one item they didn't really care if they could get it or not. So, I thought it's better to return it, and went back to the cashier right away. What I was told was "we don't do the returns, and it's on the receipt". Then I looked at the receipt, and realized there were words like " no cash refund, exchange w/ receipt" at the bottom of it. However, I didn't know that because it was the first time I went to that store, there was no sign in the store saying no returns, and the cashier didn't tell me that when I was checking out. So, I was standing there shocked, feeling like the item I had was a trash... I was arguing with them for about 10 min, they couldn't show me where they had the sign for no returns in the store. They finally returned the item, but the whole thing made me very upset.The staff in that store was not polite and honest at all.

Now I just want to know: 1. Can they do this? Is it legal they only have "no returns" on the receipt, but not telling customer before the check-out? 2. Is there a better way to deal with this kind of situation?

This happened two days ago, I'm still upset. Any suggestions will be greatly appreciated.