How do charity shops work?

Image: Chest Heart & Stroke Scotland, Dunfermline shop

Charity shops are retail outlets selling mainly donated goods to raise funds for their parent charities. Charity shops can only be set up by charities, and we estimate there are 10,200 in the UK.

When was the first charity shop opened?

In the 19th century The Salvation Army ran second hand clothing shops to provide the urban poor with cheap clothing. At the outbreak of World War Two, other charities such as the British Red Cross also started to operate shops as a way to raise money for the war effort and relieve hardship.

Modern charity shops as we understand them – retail units selling overwhelmingly donated goods to raise as much cash as possible for the parent charity – did not appear until after World War Two. The first of these was opened by Oxfam in 1947 and is still in operation today. Oxfam were swamped by donations from the public following its appeal for aid to alleviate the post-war situation in Greece. The success of this appeal yielded so many donations that it was decided to set up a shop in Oxford to sell a portion of these and to use the profits to further fund aid in Greece.

Charity shop staff and volunteers

Most charity shops have a paid shop manager, working with a team of volunteers who help to sort and sell stock. A few charity shops are entirely run by volunteers. Employing a manager can ‘pay for itself’, as these people can give more time, skills and attention to the role.

Dependent on shop chain size, there may be area or regional managers and a head of retail. There are a growing number of specialist roles, such as workforce for online selling, warehousing, drivers and cafes. See examples of job roles on Charity Retail Careers.

There are around 26,100 full-time equivalent paid staff and 187,200 volunteers nationwide.

Do charity shops pay rent and tax?

Charity shops have to pay rent on their premises, and bills for services like electricity and gas, like any other business.

Charity shops do get some tax concessions, as all shop profits go to fund the work of the charity, which provides public benefit. The key concessions are no VAT on the sale of donated goods, exemption from Corporation Tax, and 80 per cent mandatory non-domestic rate relief, which is funded by central Government.

Are charity shop staff and volunteers trained?

Paid staff and volunteers are given training on retail matters, such as health & safety, till use, customer service, sorting, pricing and display – and an introduction to the charity itself, so workforce understand what the organisation is working towards. See Charity Retail Learning for examples of training.

How do charity shops get stock?

Most charity shops acquire their stock through people coming in with bags of donations. Some shops also collect from houses, businesses and schools.

More than 90% of charity shop sales are from donations. Some shops sell ‘bought-in’ goods – new goods which are sold for profit. The average charity shop sells around 6% new goods.

What do charity shops do with things they don’t sell?

Only 6% of clothing donated to charity shops is discarded as waste. Textiles that cannot be sold are usually sold to textile recyclers: these goods will either be recycled as fabric or exported as garments for sale overseas. We recommend a TRUST-accredited collector. For more on textile reprocessing, visit the Textile Recycling Association.

Unsold books, records and other household goods can also be sold on to commercial collectors in this way.

How are charity shop donations sorted?

Donations are usually processed in the backroom. Bags are emptied onto a sorting table, and gloves worn as the donations are inspected. While some donors take great care to sort and clean their goods before giving them to charity, others are not so stringent, and charity shop workers need to beware of soiled or sharp items.

Are charity shop donations cleaned?

The majority of charity shops have steamers, which are used to clean and freshen up textiles.

How is charity shop pricing decided?

Pricing is often left up to shop and assistant managers, often using pricing guides supplied by the parent charity. Pricing guidance can often be provided by using Google Lens and referring to online selling platforms. More valuable and unique items such as antiques, jewellery, art and musical instruments will often be sold online to provide the widest possible audience.

How does Gift Aid work in charity shops?

Many charity shops claim Gift Aid arising from the sale of donated goods. This scheme allows them to claim an extra 25 pence for every £1 a Gift-Aided donation raises. Participants will need to give their contact details to the charity shop when they make a donation. When the goods have been sold, they will be notified how much they have helped to raise for charity.