By Trina Boice
Spring has sprung in my house, which means some serious spring cleaning. We’ve been on a rampage lately to unclutter our home and our lives. A wonderful byproduct of getting rid of old junk is earning some extra cash. You’d be surprised how much money is sitting inside your stuff. Tim Luke, an appraiser and auctioneer who stars in HGTV’s “Cash in the Attic,” says, “From my travels around the country, I’m convinced that the average household has $1000 to $2000 of potential cash in stuff that they don’t use.”
You’ve probably heard the saying “One man’s trash is another man’s treasure.” Consignment stores definitely believe that’s true and are seeing a huge increase in business lately as many people search for ways to bring in extra money during this tricky economy.
When most people try to squeeze money out of their stuff, they automatically think “garage sale.” Depending on where you grew up, you might also refer to them as a tag sale, estate sale, rummage sale, or even white elephant sale. You can only expect pennies on the dollar for most items, so having a garage sale is not my first or favorite strategy for pulling money out of your belongings. The trick is finding the right market for what it is you have to sell. Before you drag your kids onto your driveway and make them help you sell your old junk in the hot sun on a Saturday morning, consider selling your gently used items at a consignment store! Consignment shops are a terrific option for selling furniture, gently used designer handbags, jewelry, antiques, and clothing.
Consignment stores are a type of second-hand store in which the profits are split between the consignment shop and the seller. They are different than thrift stores, which obtain donated items and either keep 100% of the profits or else give them to a specific charity. Consignment shops will not accept used merchandise unless it is in very good condition, whereas thrift shops tend to gladly accept most anything. Typically, a store will try to sell your quality cast-offs for about sixty days. Depending on the store, you’ll either receive cash, credit, or a check after your items sell. Be sure to ask the store to explain their policy and get written receipts for any items you leave with them to sell.
I spoke with Kevin Aiken, whose mother opened “Colleen’s Classic Consignment” in Las Vegas and asked him what suggestions he had for people who are interested in selling their items through a consignment store. He counseled “The best tip I can provide is to take the time to clean and prepare your merchandise prior to sending it to the store for sale. Proper preparation prevents poor performance, and in this case, it can help to maximize the potential revenue earned from the items.” Think your stuff isn’t worth anything? Call it “vintage” and all of a sudden people want to buy it!
Not only is selling your used items through consignment stores a smart consumer choice, but so is buying from them! Aiken says “Consignment is on an upswing. Consumer habits have changed, and people now take pride in finding great deals. Consignment offers consumers a chance to embrace their uniqueness in a more affordable way. Add to that the opportunity to recycle and repurpose, and this type of shopping becomes the best way to shop smart.” I agree! Dave Ramsey, financial expert and radio show host, also agrees and says that people used to brag about how big their mortgage was, but now the financial status symbol in America is a debt-free household.
Kevin Aiken (whose consignment store’s motto is “We don’t sell icky stuff!”) explains that consignment shopping is especially smart during a tough economy because “Distribution costs in a normal retail business model are high, and these costs are always passed along to the consumers. In consignment, the cost of distribution is minimized. This allows consignment stores to pass along amazing savings on comparable merchandise.”
When asked what the pros and cons are of consignment shopping, Aiken revealed “The pros and cons are actually the same. Consignment gives consumers access to one-of-a-kind merchandise at prices that can’t be beat. Furniture, for example, can go a long way towards helping an individual define their own unique, personal style. That being said, purchasing one-of-a-kind merchandise can also be a con. The reason being is if someone finds something they like today, but isn’t quite ready to pull the trigger on the purchase, there is a good shot that one piece of merchandise might be sold by the time they return.”
That’s especially true with designer clothing for sale at consignment shops. You’ll usually find high-end, designer clothing at consignment shops, rather than your average garage sale selection. Once an item is gone, it’s gone. You’ll often find a lot of baby and toddler clothing at consignment shops because children simply grow out of clothes faster than they’re able to wear them!
A great resource for finding shops willing to help you sell your higher ticket items is www.consignmentshops.com. Just remember, your items need to be in truly good condition, if not great. You’ll find some really helpful articles on how to sell your items this way at www.ehow.com/consignment-stores/. If you have antiques that are very valuable, visit www.kovels.com, the go-to source for antiques and collectibles information.
If you’ve ever thought about opening up a consignment shop, you can learn the ins and outs from the Association of Resale Professionals at www.narts.org.
Now, what happens if, after all of your hard work and effort, you don’t find a buyer for your incredible treasures? Donate them and take the tax break! Drop off any unsold items at a charity donation center, such as Goodwill, Salvation Army, etc. Many of them will actually come to your home with their truck after your garage sale if you just set it up beforehand.
The IRS says that the fair market value of used items is the price that buyers would pay for them in a thrift shop. You need to keep a paper trail of your donations in case you ever get audited. (Shriek!) You’ll get a receipt when you donate items to a charity, but if the value exceeds $500, you’ll need to include Form 8283 with your tax return. If it’s worth over $5000, you’ll need to also send the IRS a written appraisal of gift. Luckily, you’ll be able to deduct the cost of the appraisal, subject to the two percent limit for miscellaneous itemized deductions.
Finally, the best way to decrease the time and energy you need to sell your lovingly-used discards is to stop buying so much new stuff! Live more and spend less!