I've never had to do one, but I have both regretted doing a trade, and felt that maybe others have regretted trades with me (especially newbies, who sometimes seem both excited and unsure).
If it's an "I changed my mind" thing, I wouldn't mind doing it if it's within a short amount of time (like, they just walked away and came back). But only at that same event or PTN. Online, I wouldn't want to do one, because of postage issues.
If something proves to be damaged/fake, I would expect it to be fixed on either end.
I have regretted very few trades, though, mostly because I prefer to really think it over at the time-of-trade before going "yeah, this is good!".