Charity Shops, Thrift Stores and Recycling: Over pricing is driving people away…

Growing up in England Saturday mornings were often filled with a trip to the street market followed by a round of the local charity shops. Street markets open early in most towns and sell pretty much anything that you can imagine.

In spring I’d be looking for the first bunches of freesia. Cut flowers were a lot cheaper in England than I have ever seen them here in Canada, and even when I was on an incredibly low income I could usually afford to treat myself to a bunch of flowers every now and then.

As an avid reader, I was a friend of every bookstall holder, and probably one of their best customers.

As the market would start to get busy I’d move to the High Street where there would be numerous speciality shops and haberdasheries. Often there would also be 3-5 charity shops, frequently located near each other. These shops are usually staffed by volunteers, stocked with donations, and all ‘profits’ donated to the specific charity of choice.

So in one morning I could easily support Cancer Research, Oxfam, the Royal Society for the Prevention of Cruelty to Animals (RSPCA) and the British Heart Foundation simply by spending a few pennies or a pound or two.

On moving to Canada I initially couldn’t find anything to match these experiences. In time, I found that there are similar markets such as the Old Strathcona Farmer’s Market in Edmonton, Alberta and smaller farmers markets in other places. While these don’t tend to have the same variety of offerings, and often open much later in the morning, they are still a fun way to spend some time on the weekend. Also, like in England, they are a good way of supporting local farmers, and businesses.

However, I initially found it almost impossible to find the equivalent to charity shops, until a friend introduced me to the concept of ‘Thrift stores’.

My first visit to a Value Village was a novel experience. I had never seen such a large ‘charity’ store before. You could probably fit 5-6 English Charity Shops within a single Value Village!

For the first few years after my arrival in Canada, Value Village became my ‘go to’ store when looking for ‘new’ items for my home. When you start over again, it’s the odd things that you miss the most, such as a specific size mixing bowl, or a casserole dish. Value Village is great for acquiring those odd items. It still is a store that I can wander round for a while when just looking for ideas or needing to get out for a bit.

I also enjoy supporting recycling and have found some great bargains over the years. I also like the fact that while Value Village is a national brand each store supports local charities.

However, a few years ago I noticed that their pricing seemed to increase a lot. Initially, it was their books that I found over priced. Occasionally I’ll still find a good bargain but much of the time now I wait until they have a specific book sale on, before I’ll buy books there now. When I can often buy the same books brand new for less than Value Village is charging it isn’t cost effective for me to shop there anymore.

My daughter likes ‘name brands’. I have never personally understood the attraction of paying significantly more for a logo on an item of clothing that often doesn’t last even half as long as the equivalent item without the logo. However, initially, I was willing to help her have what she wanted within the realms of Value Village pricing.

Consequently, over the years she has had closets full of Aeropostale clothing, and other brands that have value to her individually. Most often they appeared to be brand new, and often she grew out of them and we’d donate them back to Value Village in much the same condition, that they were when I bought them for her.

However, in the last year or so I have noticed that the pricing in my local store has become very inconsistent. Some days, items are still a good find, but on other days they are unrealistic and over priced.

Now, I don’t know brands and which are specifically popular (other than those my daughter likes at any one point in time) but I just can’t see how Value Village can justify this.

Most people who shop in Value Village are looking for a good deal. They’re counting on the fact that everything has been donated to the store, so they expect prices to be reasonable and just as they hope to find a deal they also want to feel good about themselves by supporting a local charity at the same time.

Just like I do, many people who shop there will also donate so the reuse, recycle process continues.

Shoppers expect to pay a little more for the items that are obviously brand new or a name brand, to pay a little less for the more worn and generic items. However, I would think that if they had hundreds to spend on a jacket they would be far more likely to shop at Wal-Mart, or one of the other box stores.

For people on a low income, Value Village has traditionally been the only place that they could afford to shop. However, as prices are rising where will these people go? It seems that those that need it the most are being priced out of the market.

At first, I thought that it was just our local store but a quick Google™ search reveals that these rising prices are being seen across Canada, and people are unhappy.

Photographs are being posted of items with their original price tickets, side by side, with the Value Village price and bizarrely the Value Village price is far higher.

In response to customers’ increasing dissatisfaction, Value Village offered a statement in November 2015

“Full statement from Value Village’s director of communications, Sara Gaugl:

It is our goal to provide great value and selection for our customers. Over 95 per cent of the items sold in Value Village stores are under $10 and less than one per cent are over $20. Each store places up to 10,000 items on their sales floors daily and each piece of merchandise is individually sorted and evaluated by our team members based on the condition and quality of the item, and then priced accordingly. However, mistakes can happen. We encourage our customers to bring any inadvertently mispriced item to the attention of our store managers so we can quickly address it.

It is also important to understand that we do not receive the goods we sell in our stores “for free.” Value Village is a for-profit business that is proud to purchase clothing and household goods from community-based nonprofit organizations to stock our store shelves. This means that whenever members of the community drop off items they no longer need or want at Value Village stores, we pay the charitable organizations we partner with for those goods at a mutually agreed upon rate (including items not suitable for resale). Our company’s payments to nonprofit organizations result in a steady revenue stream that supports their missions, totaling nearly $200 million last year alone.”

This is a beautiful piece of marketing.

Basically, they’re saying that everything that is over priced is a mistake so just take it to a manager.

Well, I don’t know about your local store, but in ours, if you do that they just take the item off the shelves and rarely re-price it there and then. So you either pay the price labeled or you do without.

They then go on to say that they don’t get anything for “free”. Well, they certainly don’t pay me when I drop off bags of donations so I think that their definition of the word ‘free’ requires some examination.

What they mean, of course, is that their business model is such that they make payments to their specified non-profit charity partners based on the volume donated to them, regardless of what is actually sold or how much it is sold for.

Hmmmmm…. Let’s think about that for a moment and work through a very simplistic example.

Let’s take 10 items and assume that for every item donated Value Village pays their local charity $5, a total of $50.00.

Now, let’s go with their statement of 95% of all prices being $10 or less and only 1% being over $20. So lets assume that they sell 9 items for $10 and 1 item for $25; they will then bring in $115.00 in revenue.

Now let’s increase the prices the way that many of us are seeing in our local stores. As a result they only sell 5 items, and 5 are unsold. The 5 items sold ranged in price from $15-$50 resulting in revenue of $140.00.

We can easily see that in the first scenario they clear $65.00 after making their charity payment, but in the second they clear $90.00.

Of course, we’re ignoring all the overhead costs in this very simple example model. However, it’s pretty obvious that the key phrase in Sara Gaugl’s statement is “Value Village is a for-profit business”.

As such, it is actually in Value Village’s best interests to raise the prices on items and sell less.

 Which leaves an ethical dilemma: Are a for-profit business’s core values more important than making as big a profit as possible?

Value Village states that their values are as follows:

“Core Values

Personally, given their business model of making payments to charity partners based on donations, not on actual sales, I think that they are currently not meeting these values. They don’t increase their donations if they make a bigger profit.

So where does that increased profit go?

While it’s not difficult to find details on the names of their Executives it seems to be much harder to find details of their actual financial statements. However, in 2015 NBC News investigated the proportion of annual revenue actually paid to the non-profit charity partners and estimated it to be just 8%.

As a result of this investigation and increasing concerns a number of charities will no longer partner with Value Village.

Now, I’m not advocating a boycott of Value Village. I think that it has its place and I must admit to personal admiration, as a Business School graduate, for the development of such a unique business model, which is very successful.

However, what I am suggesting is that we, as consumers, need to demand better pricing. We need to decide which is more important to us, our local community and values or the almighty dollar. I hope that it’s our values and local community.

There’s something inherently wrong, in my opinion, when those on a low income simply can’t afford to shop in a thrift store!

It’s time to vote with our voices and to refuse to allow these increasing prices to continue.

 In the words of Margaret Mead:

Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.

 

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