Frequently
Asked Questions
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Q. Why is resale
gaining such popularity?
There are numerous
reasons for the increased popularity of resale. One is the increased awareness
by the public of recycling. People would rather consign, sell or donate their
unwanted or unneeded items than just add to the waste stream. Consignors, donors
and sellers make money by selling under loved items at our shops, without the
expense, work, and bother of a tag or garage sale. By having a resale expert
price and market their goods, sellers realize more income than if they attempted
to do this themselves.
Eco-aware consumers would also rather purchase recycled articles in order to minimize their impact on our limited resources. Of course, one of the foremost reasons for increased popularity of resale is very simple . . . People LOVE a BARGAIN! Today's consumer is more economical and would rather buy clothing, accessories and furniture for a third to fourth of the original price, leaving money for other things in life such as vacations, education, investments and hobbies. The public is also keenly aware that resale shopping means more quality for less money.
Since resale has evolved from the image of dark, musty junk stores, thanks in large part to education by NARTS, consumers today find clean, attractive and well displayed stores that offer value and selection without the new-price markup.
Q. What’s the difference between thrift, resale, and consignment shops?
While all shops which sell
gently-used consumer goods are "resale" shops, NARTS makes the distinctions
as follows:
A resale shop is the phrase most often used for stores that buy their merchandise outright from individual owners. A consignment or thrift shop can also be called a resale shop, but ONLY a store that actually consigns their inventory can be called a consignment store, and ONLY a store run by a Not For Profit organization is considered a thrift.
A thrift shop
is run by a Not For Profit organization to raise money to fund their charitable causes. These range from
the large Salvation Army / Goodwill chains to individual
school, church or hospital thrift shops. Not For Profits can obtain goods through donations or they could operate on a consignment basis—some do both.
A consignment shop
accepts merchandise on a consignment basis, paying the owners of the merchandise
a percentage when and if the items are sold. The majority of such shops pay the
owners from 40 to 60% of the selling price, and have a policy of displaying
goods for anywhere from 30 to 90 days, although there is a wide range of
policies across the country. Some consignment shops also purchase a variety of
items outright from individual owners and/or wholesalers
Q. What should a consumer look for when shopping resale?
Look for quality of workmanship and materials. A quality item might cost more at resale than an inferior item does new, but the workmanship, style, and value of any well-made item, from a sofa to a designer outfit, provides more value at resale.
Q. How can a person who wants to consign or sell items choose a shop?
Explore the store
beforehand. Do they sell the type of merchandise you want to bring in? Talk with
the staff about becoming a supplier. Are you comfortable with their procedures?
Most resale shops have information on supplying available as a handout or a
phone recording. Finally, understand the shop’s terms before you consign or
sell. Will you receive an accounting of items accepted for sale? What happens if
your items do not sell? When and how much will you get paid? Most importantly,
look for the NARTS decal, it is "Your Assurance of Professionalism."
Q. Why should I take my items to a consignment or resale shop instead
of selling them on eBay, having a garage sale or taking them to a home
swap party (where friends trade their treasures or clothes)? Resale and consignment shops have an
established clientele looking for the kind of items they accept on consignment
or purchase outright for sale.
You don't have to pack and ship each item you
sell. One quick trip to your favorite resale/consignment shop is a real
timesaver. Selling furniture and other
large items on eBay can be problematic due to the shipping. Selling
them directly means you have to let strangers into your home and worry
about scheduling appointments. Working with your local consignment or
resale shop is safer and more convenient.
No need to deal with returns or bounced
checks. Once your items sell at a resale/consignment shop you are paid.
Listing items on eBay or organizing a garage
sale requires a great deal of time and effort. Resale/consignment shops do the
work for you—they display your items attractively, advertise for customers and
handle the entire sale process. The
percentage of clothing listed on eBay that actually sells is low. It
is much easier to sell clothing at a resale/consignment shop where
people can "touch and feel" and try things on to make sure they fit
and look well.
You can make more money in the long run by
consigning than with a garage sale, swap party or eBay. Consignment/resale
stores will get the full value because store owners know the real value.
Q. Does it matter which charity I donate items to?
Most people donate items to on of their favorite charities. We usually like to see the money or items we donate go to a cause which is dear to our hearts.
Q. How do I determine the
value of donated items for tax purposes? Get a copy of
IRS
Publication 561,
"Determining the Value of Donated Property," this information will help you
determine the value of your donations and also outlines how to support the
deduction on your tax return. The publication states, "If you give used clothing to the Salvation Army, the FMV
(Fair Market Value) would be the price that typical buyers actually pay for the
clothing of this age, condition, style and use. Usually, such items are worth
far less than what you paid for them." You can check the thrift and
consignment shops in your area for prices on items similar to those you are
donating. Another option to calculate the
value of donations is offered by
TurboTax ItsDeductible, the Blue Book for Donated Items.
This software program can be used to accurately
value your donations, in compliance with IRS guidelines, and maximize your tax
savings. The company visits resale and thrift shops
all over the country to keep up on current valuations.
The Salvation Army has a
Donation Guide you may find helpful. Jackson Hewitt's Web site
includes a handy
Donation Organizer that lets donors rate thousands of items
according to condition. The
Better Business Bureau Wise Giving Alliance
The "fair market value" of goods donated
to a thrift store is deductible as long as the store is operated by a charity.
One cannot take a deduction if the goods are sold on a consignment basis whereby
the original owner gets a percentage of the final sales price.
Most Not For Profit thrift shops give donors a blank receipt at the time a donation is dropped off. They do not itemize the receipt because they generally can not process the items until a later date. It is up to you to itemize your donation and determine a value for the goods.
• Give items to a qualified charity that has tax-exempt status from the IRS. check charities out through the alliance's We site or through IRS Publication 78, "Cumulative List of Organizations."
• Claim the fair-market value of donated items. Keep a detailed record that includes the number of items and their condition.
• Keep photos of items to substantiate larger donations.
• Get a signed, dated receipt from the charity. Federal law requires it for deductions of $250 or more, but tax experts suggest receipts for smaller donations as well.
• If you claim non-cash donations of $500 or more, you must files Form 8283, "Non-Cash Charitable Contributions," with your tax return. If you claim a deduction of more than $5,000 in goods, you need an appraisal to include on form 8283.
• There are special rules for the donation of cars and other vehicles.
• Gifts of appreciated property are subject to special rules.Always remember to consult a financial advisor or the IRS for additional
information or when in doubt about the deductibility of contributions.
Q. My mother-in-law doesn’t like me to shop resale for my kids’ clothing. What do I tell her?
Take your mother-in-law resale shopping with you one day. She will see the savings you are accumulating by outfitting the kids in quality clothing. Take the kids along on the same trip, and Grandma will recognize that her darlings can have fun choosing items for themselves while learning the value of a dollar. Finally, let her know that the money you’re saving can pay for music lessons, buy sports equipment, and be stashed away in her heirs’ college funds.
Does your mother-in-law realize that a resale shop has a larger selection of styles and a wider range of sizes than any new shop could afford to stock? Not only are you saving money by shopping resale, you are saving time and energy too!
And finally, tell her that
buying resale is no different than the long accepted practice of buying antiques
and collectibles, used card and boats, and coveted first edition books. Even
though the new clothes you purchase have not been previously owned, they usually
have been previously tried on . . . not much difference when you think about it.
It's also no different than staying in a fine hotel where, after
all, you sleep on used bedding. In fact, buying
resale might mean you can afford to have that lovely weekend away!
© 2008 National Association of Resale & Thrift Shops, All Rights Reserved | Phone:800.544.0751 | Fax:586.294.6776