I can't remember the last clothing I bought for any of my three little boys from a regular retail store. I (and my wallet) prefer to stock their closets with a funky variety of clothes picked up at thrift stores, garage sales, and the Goodwill outlet. Same with the majority of our toys and kids' room bedding. What I don't buy used, I buy (as much as possible) from small local crafters or other small toymakers.

I was already ranting and raving about how the CPSIA -- the bill that requires toys and children's products (from clothing to bicycles to sippy cups) be tested for lead and phthalates before they can be sold -- will put most small toymakers out of business in the U.S. entirely. Then tonight one of my friends brought it to my attention that these same restrictions will virtually end all resale business in children's products. While the phthalates testing is only required on products manufactured after the act goes into effect on February 10, 2009, the lead testing is required on all products sold in the country, including resale. This means no thrift stores, no Goodwill, no garage sales, no rummage sales, no eBay, no toys or baby clothes or cute children's t-shirts at craft bazaars, no nothing that hasn't been passed through the CPSC with its enormously expensive testing requirements.

With bank balances in the danger zone and credit cards nearly maxed out, most Americans have been forced to adjust their spending habits, especially when it comes to things like new clothes.

But just because we can't afford to spend, that doesn't mean we want to stop shopping! Still, there's only so much look-but-don't-touch a person can put themselves through without either getting too depressed or losing the willpower to not overspend. The solution? Thrift stores!

It's hard to get yourself into too much trouble in a store where nothing costs more than a few bucks, and more people are discovering the joy of secondhand shopping every day. While major retailers are scrambling for business, three quarters of resale stores reported sales jumps for September and October, compared with the same period in 2007, and the average sales increase in these stores was approximately 35%!

There was once a bit of a social stigma associated with buying used goods, but nowadays, most middle class families are shopping garage sales, thrift stores, and eBay for clothes, toys, and home furnishings. The stigma is all but gone, though when it comes to shopping for holiday gifts, many would probably still consider it poor form to buy used items. Nevertheless, you can free up the cash for those brand new gift items by shopping secondhand for yourself, as many are already doing.

Have you been to a mall lately? It's sort of a depressing place. Lots of stores have vacated the premises, and with the clerks that are left manning the surviving shops and kiosks look like they're starved for social interaction. There's just no one there. The Christmas music playing over the PA seems out of place in such a deserted venue.

The real shopping crowds this holiday season aren't at the mall -- no one's paying full price this for anything anymore. But you will find long lines at your local thrift stores, where you can purchase new and gently used clothes, furniture, accessories, and more for just a few bucks a pop, whether you're buying Levi's or designer jeans with the tags still on them.

Thrift stores are a great place to find inexpensive treasures, especially when "vintage" is so totally in style. Don't make the rookie mistake of thinking of thrift shopping as going through other people's trash. Lots of things for sale there have never been worn before at all, and everything has to be in decent condition before they put it on their racks, even at Goodwill. Tons of the things you'll find there are actually straight from the mall -- when stores can't sell all their merchandise, they send it to thrift stores to make room on their own clearance racks. These items might be a season or two behind the actual weather, but they're brand new, and the seasons will roll around again next year.

Secondhand shops are an especially great place for women to look for formal wear. So often, a girl will spend hundreds of dollars on a prom dress that she only wears once -- then it finds its way to the Goodwill racks after only a few hours of wear, and now it can be yours for less than $10. Avoiding the mall also means you're less likely to show up at your next formal wearing the same dress as everyone else who shops at JC Penney. (My local mall isn't very big, so my high school prom had 200 girls all wearing the same 10 dresses.)

The low prices of thrift stores are clearly a draw during tighter economic times. Re-sale and thrift stores say their sales are booming. But even without challenging financial situations, owners of thrift stores say their business is essentially recession-proof. They say everyone loves a good bargain, so they're always busy.

One of the favorite parts of thrifting is finding high-end brands that are gently used, or sometimes even new with the tags still attached. Prices in second hand shops are often 25% (or even less) than the retail price of the goods. And don't think that the store owners aren't making money. I work with a second hand furniture store that has great profit margins on their stuff!

Check out this video for more from thrift shop owners and shoppers..


Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Pssst, Hey buddy, have I got a deal for you.

Every once in a great while you might get an approach similar to that at your friendly neighborhood resale shop. That can be especially true if it's a shop you're not very familiar with. When a thrift store employee or operator brings out something from under the counter which they have "saved for special customers,"... watch out! The chances are good that you'll be looking at an item from a questionable source.

Take for instance that mint condition collection of Buffalo Head nickels, or a complete set of sterling silver flatware in its own velvet lined case. The sales person may tell you that it came from an estate sale they were at that same morning. Take care about your purchase or you could become guilty of receiving stolen property. It's a dead giveaway when the store clerk suggests that you go outside to look at items they have in their car. Yeah, it's not on the shelves and it's not on the books. Ask them if you really look that much like an idiot.

When most people think about thrift stores, they imagine musty aisles filled with broken toys, knick knacks and outgrown clothes which have been tossed aside by people without the patience to have their own rummage sales. I however have a different attitude towards those shops filled with cheap goods awaiting a home. I have discovered treasure in those shops in the form of brand new merchandise. Yes, on a regular basis my wife and I purchase unused items with the tags still on them, and we buy them at absolutely rock bottom prices.

You see, thrift stores get their merchandise from many more sources than just their dedicated drop off sites. Manufacturers can often take handsome tax deductions by donating their discontinued goods and irregular items to charitable organizations. When small retailers go out of business, they sometimes have unsold inventory picked up by organizations such as The Salvation Army, Goodwill and other smaller operations. Even large chain discount stores sometimes get into the act by donating open box items, discontinued styles and display goods.

I have included with this blog post a small gallery of still tagged items we have on hand right now. These and many other pieces like them make up the bulk of my wife's inventory which she sells on eBay and HiBidder.com. Most of the time the new items have had the tags already removed from them but sometimes we find them with retail tags still attached and looking like they were just purchased at your favorite shop in the mall. Don't let the prices that resale shops charge fool you, often times you can find first class merchandise in those shops and they'll sell it to you for far less than you'd expect to pay at Wal-Mart.



This post was written as part of a series on how to thrift shop smarter. Read more on what to buy, and not to buy, at thrift stores.