We had a similar situation in our store once. The RCMP was asked the question, and here is the answer:
No, you (the store) cannot keep a phone. Unless it can be proven that the phone has been stolen, the store cannot simply assume that. It's quite possible that the person bought the phone from someone who's account owed money, or maybe the phone was reported lost, the customer bought a new handset, found the old one and decided to sell it since they already bought a new one.
So unless the store can contact the original owning customer and ask them, they can't legally hold the phone. In fact, the store can be fined / sales rep charged with theft if the phone turns out not to be stolen.
That said, anytime I get a phone like this that looks / feels iffy, I let the person who brought it in know that it's been reported as stolen, and that the original account holder has been contacted. In all cases so far, the person dropped the phone, got up and made a run for the door.
But again, if the person said F*ck you I'm taking my phone with me, there's nothing I could have done about it.