Is Shopping Secondhand the Perfect Tariff Loophole?

The Trump administration’s latest trade measures are set to have a significant impact on the price of apparel and footwear, with estimates suggesting that prices could increase by as much as 40%. While an appeals court has struck down the tariffs, they are set to remain in place at least until October 14th, leaving consumers to deal with the potential price hikes.

In a time when inflation is already affecting consumers, these looming price increases are pushing more shoppers to consider secondhand options. The resale market has been steadily growing over the past few years, nearly doubling in size from $23 billion in 2018 to $43 billion in 2023. It is projected to reach $74 billion by 2029, according to ThredUp’s annual resale report.

The rise of TikTok thrift hauls, sustainability influencers, and eco-conscious shoppers has fueled the trend towards secondhand shopping. Younger consumers, particularly members of Generation Z, are leading the charge, with approximately 83% interested in or having purchased secondhand apparel. This demographic, born between 1997 and 2012, is driving the shift towards more sustainable and affordable shopping habits.

David Eagles, the chief operating officer of Goodwill Industries, notes that the changing attitudes towards resale have been transformative. He attributes the shift to the younger generation, who see the environmental benefits and uniqueness of secondhand shopping. The pandemic further accelerated this trend, with Goodwill seeing a 50% increase in their network due to a surge in donations and shoppers.

Now, with tariffs threatening to increase the prices of new clothing, more consumers are turning to secondhand options out of necessity. Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, notes that Gen Z consumers are more likely to purchase secondhand clothing when faced with rising prices. Their influence, combined with economic pressures, has turned resale from a niche choice into a mainstream habit.

Non-profit thrift stores and digital resale platforms are already seeing the impact of this shift, with some experiencing increased activity and interest. As consumers look for more affordable and sustainable options, the resale market is poised to continue its growth and become a more integral part of the retail landscape.

Some resale stores are reporting booming donations and higher foot traffic, indicating a strong interest in secondhand shopping. However, other stores are seeing shoppers browsing as much as ever but buying slightly less. This trend is likely due to rising prices on everyday essentials, forcing people to tighten their spending on non-necessities.

Despite these challenges, experts remain optimistic about the resale market. One key factor contributing to the market’s resilience is that retail resale inventory comes from donations rather than new imports. This means that the market is largely insulated from tariffs, providing a buffer against rising retail prices.

Lisa Rusyniak, president and CEO of Goodwill Industries of the Chesapeake, explains that secondhand clothing has already been purchased once and does not incur import duties. This affordability makes secondhand apparel an attractive option for consumers looking to stretch their budgets without sacrificing quality.

However, the surge in interest in secondhand shopping is creating pressure on stores in various ways. As more shoppers turn to resale, they are becoming increasingly price-conscious and are carefully considering each purchase. This trend has led to a decrease in the average price per item sold at some stores.

In addition to consumer behavior, thrift shops and secondhand stores are also feeling the effects of rising demand for certain items. This increased demand is putting upward pressure on prices, particularly for high-quality and branded items. As more consumers seek out these popular items, their prices are expected to rise.

Shannon Erickson, manager at Delivering Dreams of Arizona, notes that her store is also feeling the pressure of rising demand and prices. Despite the challenges, the secondhand market continues to be a valuable resource for consumers looking for affordable options in the face of rising retail prices.

Overall, while secondhand stores may face challenges in the form of strained budgets, supply pressures, and rising prices, the market’s resilience and growing interest from younger consumers suggest that secondhand shopping could continue to serve as a buffer against retail price increases. The long-term outlook for the resale market remains uncertain, but for now, it appears to be weathering the storm.