It sounds like you were getting somewhere with the conversation you were having with him where he agreed that returning the used light switch was not ethical. Can you dig deeper into why he still wants to do it even though he knows it is wrong? Why does he think you shouldn't judge him for stealing? Why is it up to you to accept the bad behavior and change your way of thinking when he could just as easily change his behavior to resolve the judging issue? If he is willing to have conversations, I would keep asking the hard questions.

What if your light switch is broken because the one that was installed was a defective return someone unwittingly purchased?