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What Happens to Items That Don’t Sell at Pay By the Pound Stores?

There are a lot of items that get donated to thrift stores and sit on their shelves. After that, they make their way to a pay by the pound store, and then what?

So what happens to items that don’t sell at pay by the pound stores? Some locations bundle all the textiles and sell them to an overseas buyer that will either recycle them to make new textiles or give them to third-world people. Other locations will hold an auction to liquidate item by the bin or gaylord box before recycling or disposing of.

It’s important to note that not every thrift store does things the same. Even within the same franchise network, a location in Ohio will do things differently than in Arizona. However, here are some of the ways that pay by the pound thrift stores get rid of unsold items.

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Selling in Bulk via Auction

Usually, the next step after remaining unsold at the pay by the pound store, merchandise will be put in a bin or large gaylord box and auctioned off. Many Goodwill outlet stores do this.

For example, the Goodwill Industries of San Diego County outlet and clearance centers hold auctions in two on their locations. On location auctions off clothing and the other does electronics, housewares, and furniture.

Here is how the San Ysidro Outlet auction works:

Goodwill’s San Ysidro Outlet holds two auctions daily at 10:30 am and 1 pm that include clothing, shoes, linens, and accessories in large bins or carts. To get a bidder number, please register in the lobby before participating in an auction.


  1. Piece Sales (8 am – 12:30 pm): San Ysidro offers a great variety of clothes that are sold for $1 a piece. Customers can select exactly which items they want at great prices.

  2. Tote Sales (1 pm – 4 pm): The clothing that does not sell during Piece Sales can be purchased in totes at even more affordable prices!

Here is how the Otay Outlet auction works:

Goodwill’s Otay Outlet holds two daily main auctions of furniture, electronics and wares. Five additional smaller auctions also occur each day. To get a bidder number, please register in the lobby before participating in an auction. Product previews begin 30 minutes before each auction!


Bikes (8:15 am). Furniture, Electronics, and Wares (8:30 am). Books (10 am). TVs (11 am). Books (12:30 pm). Furniture, Electronics, and Wares (1 pm). Books (2:30 pm).

Keep in mind that this is how the San Diego County Goodwill Outlets work, this is not necessarily what all Goodwill Outlet’s do across the country. Here is a great look at how auctions work at the Appleton, WI Goodwill Outlet

Last Stop… Recyclers

Clothing items that fail to sell at pay by the pound stores or at auction are bundled into large bales and then sent to textile recycling organizations. One such organization is S.M.A.R.T. (Secondary Materials and Recycled Textiles Association). It’s estimated that and anger of 45% of clothing that travels through the S.M.A.R.T. program is either 1) resold back into the US used clothing industry, or 2) sent overseas to markets with more demand.

Approximately 30% of used clothing that is sent to textile recyclers is cut and turned into rags or cloths which are used for wiping or polishing in commercial and industrial settings. Approximately 20% of used clothing and textiles is processed back into basic fiber. This is used to make furniture stuffing, upholstery, residential insulation and more. Only about 5% is considered unusable and disposed of, usually because the textiles are wet, moldy or contaminated with solvents or chemicals.

Electronic items are often sent to an e-cycle facility such as Electronic Recycler International (ERI). These recyclers demanufacture items like TVs and computers to make sure that they are recycled and reused safely. Companies lie ERI recycle around 25 million pounds of e-waist on a monthly basis, keeping harmful materials out of landfills!

Goodwill estimates that around 95% of the donated items are either resold or recycled in one manner or another. That leaves only 5% of donated goods actually going to the landfill! At a lot of stores, the only things that go into the garbage are items that are too broken to be reused and unsold items that contain glass. Goodwill does not want to risk items breaking in transit from one location to another and then injuring customers or employees.

Local Ministries

Some local ministries take unsold clothing and housewares and give them away for free to the needy in their area. For example, the Salvation Army often gives out these types of items to the needy in their area, in addition to provided meals and shelter.

Opportunity for Resellers

If you’re willing to do a little research and make a few phone calls, you might be able to snag some of this clothing before it gets shipped off to the textile recycler.

A few years ago we called around to a few of our local thrift stores to see if we could purchase clothing items in bulk. Unfortunately, Salvation Army didn’t want to see us anything because they already had a good recycling system set up by selling compressed bales of clothing to a large company.

However, we did talk to our local St. Vincent de Paul store and they were more than willing to let us come in a see what they had. When we arrived, the store manager explained that around 50% of the donations they receive don’t even end up on the sales floor. “We know our clientele and the things they will and will not buy”, she said. Keep in mind that our SVdP store is in a very rough and low income part of town, so she told us that a lot of times they don’t even bother putting out high end dress pants, shirts, and new with tag items because they simply won’t sell.

Therefore, they sort the items before putting them on the sales floor and everything they don’t want to sell goes in large clear garbage bags. They have a bay that a large truck backs up to every week and takes their donations to a textile recycler. Thankfully, they were willing to strike a deal with us to sell some of these bags to us since they were making very little, if anything, on them.

We agreed to pay them $10 per bag and each bag had to weight at least 50 pounds. That’s only $0.20 per pound!

Keep in mind that we just bough bags, sight unseen. We could see through them since the bags were clear but we didn’t really know what we were getting. However, they were nice enough to let us go through their pile and choose what bags we wanted. The other really nice thing about this was we were able to go through all the clothing and then bring back what we didn’t want. They let us put our return bags in their recycle pile so that we didn’t have to worry about finding a place to throw them away. And there was quite a bit that we rejected… anything from no-name brands that we didn’t think would sell well to damaged and flawed items.

We did make some money though. Here is a breakdown of our cost per item and total profit after we sold everything.

$50.00Total Investment61Number of sellable items$0.82Cost per item

$533Total Sales– $252Total selling Fees– $50Total investment

Total Profit = $231

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