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Why don't retailers donate unsold clothes to charity?

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Advice columnist Ann Landers has attacked a practice engaged in by some clothing retailers in her column. The retailers will slash or tear items they have been unable to sell and throw them away instead of giving the merchandise to employees or low income people. Ann was puzzled by this behavior. The only plausible explanation she could think of was one suggested by a Nebraska reader: Stores are trying to protect themselves against people who will obtain such merchandise at no charge and then bring it back to the store for credit. Can you give her an alternative explanation?

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Solution Summary

In answer to a question posed by Ann Landers, this solution gives an alternative explanation based on economic incentives of why retailers do not donate unsold clothes to charity.

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If the retailers give their clothing away for free there is nothing to prevent the recipients from reselling the brand new clothing. If the retailer's practice of ...

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