Why Are Thrift Store Prices HIGHER Than Shopping New?

I love thrifting as much as the next susty girl but why in the world are prices so high? Their inventory is FREE?

Yes, I get it, they have to keep the lights on and run the AC and pay for tags and pay the staff…but if small thrift stores can keep prices low, why can’t Goodwill and other large corporate thrift stores?

Especially comparing these items to new items, it’s becoming MORE expensive to shop secondhand which is unheard of in history. I’ve been wanting to make this video for a long time but it was this TikTok that sparked it for me. If you don’t want to watch it, in summary, someone went to their local Goodwill and found a note in a jar priced for several dollars and the note said “you can get this new for $1.25” which is true, but sad. Used items should not cost MORE than it does to make a product from scratch, from new materials. Plus, it’s used items that the store got for FREE!

So, let’s find out today!

Where do thrift stores get their inventory?

They get their inventory from us. Maybe our clothes no longer fit or we don’t like the style any more. Maybe we just simply never used that kitchen gadget or that piece of decor. Whatever it may be, we all find ourselves decluttering every now and then and dropping our old items off at the thrift store to limit our environmental guilt.

Now, donating is amazing, keep doing it. But as you will see by the end of this post, it matters WHERE you’re donating those items. If you want to cut to the chase, check out this video, the truth about thrift store giants like Goodwill. This is often people’s first choice for donations so these mega thrift stores become overrun with products. I’m glad it’s not going to end up in the landfill, right?

Most of the time yes, it will be re-sold. But, thrift stores also get garbage: stained, dirty, broken, torn, unusable items that they simply cannot sell. So, they do throw some of that inventory away. Other items just simply can’t be put out on the floor due to too much product. It’s shipped to those big bin stores where you can buy a ton of stuff on the cheap or worse, it’s sent overseas for someone else to deal with.

So, when donating, opt for a small thrift store or other options such as:

Selling the items on secondhand sites like Mercari, OfferUp, and Facebook Marketplace to name a few
Giving them away for free on your local Buy Nothing Group
Women’s shelters & homeless shelters
and more!

Give back directly to your community instead of helping a CEO make a profit. Speaking of…

How much does Goodwill make?

According to Paddock Post, the CEO of Goodwill in 2022 made around $422,000. Not as much as I was thinking, but that’s a huge profit for a company that gets it’s inventory for free.

According to Indeed, the average “average Goodwill Industries hourly pay ranges from approximately $11.59 per hour for Sales Associate to $24.45 per hour for Case Manager.” So, that would be around $24,000 a year for a Sales Associate and $51,000 a year for a Case Manager. Not a whole lot. But, they do employ 105,000 people worldwide. Let’s take the average of those two wages and say on average, they pay all 105,000 people $37,428 for a total of $3.9 billion in employee wages.

According to Forbes, Goodwill had a total revenue of $7.6 billion in 2023. Wow! I guess the rest of their money goes to paying other heads of the company? Now this number does include $1.5 billion in private donations likely all of which goes back to charity. Speaking of charity…

Don’t they give to charity, too?

That same Forbes article states that $5.6 billion was given to charitable services. What does that mean? Where does it go? Apparently, most of Goodwill’s charitable giving goes to career development centers and job search programs in North Carolina. But Reddit insiders say that a good majority of the stores are employed by people through these programs AND they get government assistance for these programs. So, is it out of the goodness of their hearts that they do this? I’m willing to assume no but maybe I’m being cynical.

Also, remember the last time you went to Goodwill and were asked to round-up? Yeah, that’s money that they can use as a tax write-off donation that doesn’t come out of their profits. It comes out of YOUR paycheck. I’m not saying to not give to charity, but perhaps you can make a donation to that charity in your own time instead of giving Goodwill an out.

Okay, okay. Maybe I’m picking on Goodwill a bit, but they are the main culprit for jacked-up thrift store prices. Let’s move on to the real problem.

Me and my secondhand film camera + outfit

If they get inventory for free, why do prices keep going up?

There are some valid reasons that make sense why some thrift stores (particularly small ones) have to increase prices:

Increased rent and utilities, fair
Increased wages, fair
Demand, ehh…many economists say this is a valid reason to increase prices of secondhand goods but I don’t see it that way. Your supply is FREE. But what about resellers? We will get to that soon.
They do need to buy other things like signs and tags
Marketing budget

But regardless, secondhand items should NEVER cost more than a new, cheaply made, unethical new item. But is this the thrift store’s fault? I think partially, but fast fashion, and fast “items” are to blame, too. Companies like Walmart, Target, Shein, Temu, H&M, and so many more are known to use unethical labor which consists of underpaying people, cutting corners for employee safety, and more in order to keep prices low and profits high. So, just cause a new glass jar at Walmart costs less than a secondhand jar at Goodwill doesn’t mean it’s entirely Goodwill’s fault. But I think they should be responsible for their pricing as well.

Keep in mind, the pricing at secondhand giants like Goodwill is a corporate problem. Don’t blame the employees in the store, they’re just doing what they’re told.

Are resellers the problem?

It’s hard to say a hard yes or a hard no. Are resellers increasing the demand for thrifted items? Absolutely. But has thrifting as a trend also gone up in recent years, the same years that reselling has gone up? Absolutely. Therefore, it’s hard to say it’s just one or the other.

Regardless, bringing it back to demand from earlier, thrift stores, especially large, for-profit thrift stores, do NOT have to adhere to demand…again, their supply is FREE. It’s basic economics. Should they increase prices in order to pay employees fairly? Sure, but as we saw earlier, Goodwill isn’t hurting in the money department and had a lot left over after paying all of their employees.

Not to mention, their supply is seemingly endless. If they were worried about making money, they should sell more items instead of shipping much of their inventory overseas for other countries to deal with. In fact, this 2018 report states only 25% of inventory makes it to the floor (I know, this IS Canada). If they’re increasing prices under the guise that thrifting is trendy and resellers are buying too much, put more out on the floor. Sell more for less instead of selling less for more.

Rather the problem is Goodwill and other companies like Savers want to get in on the reselling action. They see that resellers can make money for their thrifted name-brand items from Nike or Lulu Lemon so they’re doing the same. They still overprice basic and non-name-brand items but they WAY overprice name-brand and then blame resellers for this demand.

I get it, to a point. If I’m selling something nice versus not-so-nice at a garage sale, they would be priced differently. But the difference is I’m not claiming to be a charitable organization that gives back to it’s employees and the public. Quite frankly it goes against what a thrift store is.

What can we do?

Keep decluttering and avoid sending your items to the landfill. But please stop donating to places like Goodwill, The Salvation Army, and Savers. Instead donate to a local, small thrift shop that keeps prices low and does more for your community than the secondhand giants ever could.

Keep shopping secondhand! Check out the full “importance of shopping secondhand” post or video. It’s so important to reduce the demand for new products and keep using what’s already been created. This also reduces what is sent to landfill which, spoiler alert, landfills are running out of space. Instead, again, shop at small thrift stores that are locally owned and operated, not mega-corporations. You can also opt for supporting resellers or firsthand sellers on secondhand sites like Mercari, OfferUp, eBay, Facebook Marketplace, and more.

If large stores are your only option, I understand, but do your best to avoid them!

Truly, those are the best two things to do: shop and donate only at small thrift stores. But that matters. Companies follow the money. They can increase their prices to the moon but won’t make a profit if we quit giving them our money and demand they stop this.

We have power!

I hope you enjoyed this post and learned something valuable from it. Another lesson is to quit blaming one another like blaming individual resellers. That’s exactly what they want. But we are on the same team.

As always, remember that your small actions make a big difference in the long run :)

Emma