I don't know how we got this rule wrong, but we played that when someone traded in a set and moved the Sheriff, you took a card from the deck and without looking at it, put it directly into your victory pile instead of into your hand. This made it very valuable to have the same number or less cards than the number on the sheriff space. It made players trade in their sets faster. It made it a bigger gamble to horde cards in order to get the lucrative assignment cards.It made ambush cards more desirable. You didn't want an opponent to make a trade and to further benefit his score from having less cards than the next sheriff space.
All in all, our mistake made the game much more interactive.
I may have read about this variant somewhere before I played my first game. Did anyone else play this way?