I’ll admit I don’t know the economics of running a thrift store and I realize they are going to vary from case to case. So I’m just looking for opinions.
As I see it, there are two opposing ways to look at shopping at thrift stores.
The first is that thrift stores are run by charitable institutions. When you buy items at a thrift store, you are providing them with money which they can then use to carry out their charitable functions. So it’s an ethical positive to shop at thrift stores.
The second is that the primary purpose of thrift stores is to make it possible for low income people to buy things they couldn’t otherwise afford. If somebody who isn’t low income buys an item at a thrift store, they are denying some more needy person the opportunity to buy it. So it’s an ethical negative to shop at thrift stores.
According to people at Good Will I spoke to, the first is more true. The money they make lets them run their programs. When I was moving (downsizing) I donated a lot of belongings to Good Will.
It is possible other thrift stores operate differently.
That is by no means clear to me. Goodwill bills themselves as providing work for low income people for example. But let’s continue:
Let’s shift the argument a little. There’s a lot of crap at thrift stores. After being showcased, a lot of it is shipped to the third world (at least in the case of clothing). When the rich or middle class shops at a thrift store, that results in some combination of:
a) higher thrift prices for the poor,
b) worse selection for the poor,
c) some expansion of selection, to the extent that some people take a higher charitable deduction for the goods, or to the extent that some are selling the thrift store these goods.
I don’t think any of the 3 are that different than a middle class person or rich person shopping for any basic good with an upward sloped supply curve (it won’t make a difference for perfectly flat or infinitely elastic supply curves).1 Generally speaking, a good way to help the poor is to hand them money, then let the market sort out who spends what.
There’s also:
d) higher revenue for the thrift store, which helps them to cover their fixed costs. Meaning, if you bar the middle class and rich from thrift stores, there will be fewer thrift stores.
This might be a good question for a problem set in introductory economics.
1 Generally speaking, long run supply curves tend to be pretty flat, though I’m not certain that would be the case in this application.
My understanding is that Goodwill and Salvation Army (the main thrift store operators in the US) pull valuables out of the thrift store inventory and list it for sale online at higher cost. So it’s not even available for the needy to purchase.
Not only that, but aren’t the needy “given” stuff like donated clothing before the rest of the clothing is put up for sale at a thrift store (or disposed of)?
I don’t know the internal workings of thrift stores, but I do know the rummage sale that my church hosts every year. We get a lot of clothes, and by the end of the sale, we’re selling them for almost free ($2 for a full-sized paper grocery bag full). Even with that, over half of what we get in is still unsold at the end of the sale (which we then re-donate to whatever thrift shop is willing to send out a big truck to pick it all up).
With that much surplus clothes donated, there’s plenty for everyone to shop there. You’re not denying anyone the opportunity. I mean, I guess you’re denying someone else the opportunity to buy that particular shirt that you’re buying, but the truly needy don’t care all that much about the witty quip on their T-shirt, and besides, who knows if that’s even the shirt that some other hypothetical person would have specifically wanted.
I’m not disputing your post, but it was my understanding that giving money (directly) to the homeless is a suboptimal choice, as they often use it for drugs/alcohol/etc. I was always told the best choice was to give money to charities that directly help the poor and homeless.
No, because they’d decrease their income by much more than they’re decreasing their expenses. If the expert identifies a $500 item that would otherwise have sold for $5, that’s $495 extra for the people who need it. And the expert probably finds a lot of those items.
I question whether that is a primary, let alone an actual, purpose of any thrift store. There are the equivalent of food banks for things like clothes and appliances where your donations will be given free of charge to the needy. “Selling” stuff to the needy hardly qualifies as a good work of charity in my book.
Wiki on the Global Trade of Secondhand clothing, emphasis added:
The global trade in used clothing is primarily sourced from charitable organizations in wealthy countries, like Oxfam, the Salvation Army, and Goodwill. Although some donations are distributed directly to populations in crisis, most are sold, with the proceeds used to support other charitable operations. A small amount of clothing donations, usually no more than 10%, is sold domestically.[3] Clothing that remains unsold locally is often sold to textile recycling companies, which in turn export the materials to countries with established secondhand textile supply chains. Here, they are sorted, appraised, and either recycled, disposed of in landfills, or resold.[4]
Trade in secondhand clothing represents around 0.5% the value of the trade in new clothes, and around 5% by weight.[5] Official figures suggest that the biggest importers of used clothing by weight in 2018 were Pakistan, India, Malaysia, and Angola.
In wealthier Western countries, used and pre-owned clothes are popular among a niche market of cost-conscious or environmentally conscious consumers.[7] In contrast, second-hand clothing from wealthier countries is a staple source of clothing for many people in developing countries.
So the OP is discussing perhaps 10% of the thrift store clothing market. Most used clothing is bundled, compressed, and shipped to the third world.
Years ago I started a thread in FQ looking to find out if this advice was evidence-based, and got (only) one good reply that summarized the research as of that time as “inconclusive bordering on non-existent.” I’m not sure if any new research has come out since then.
That is, as far as I know it, the purpose of thrift store sales. Full stop.
It converts donations of goods (that would cost even more money to distribute to individuals in need than merely running a store) into cash, which can be more easily put to good use helping low-income individuals and households worldwide.
Agree. My understanding is those in need are “given” stuff, and surplus items are sold to others who can afford to pay for it thru these thrift stores. Shopping at a thrift store provides the charity with needed income and takes stuff off their hands, without depriving those in need - win-win-win?