Target Wants to Give You Cash for Old Clothes

Purging your closet feels really good. But you know what enhances that euphoria? Donating those old threads and getting money back to buy replacements. And that’s precisely the deal Target struck with ThredUp, a secondhand clothing startup.

So here’s the gist: customers order a “clean out kit” online, which is basically just a big plastic bag covered in polka dots, and stuff it with unwanted wares that fit with ThredUp’s quality standards. (Full disclosure: the San Francisco-based company admits it “typically accepts less than 50 percent of the items” it receives.) Next, either lug the bag to a participating Target location, local FedEx Office, or have a mail carrier pick it up with all shipping costs billed to Target.

The Target bucks you get in return for parting ways with your old duds is determined based on the original price the piece was purchased for, the brand — favorites are J.Crew, Mini Boden, Ralph Lauren, Kate Spade New York, DVF, and Marc Jacobs — condition, trendiness, and various other factors. Some items might be great but don’t fit ThredUp’s standards and therefore are sold to third party sellers. Those not in wearable condition are recycled through a partner and get a second life as a carpet, pillow stuffing, or other useful everyday item.

Currently, the service is only available in Target’s home base of Minneapolis, but based on the fact that the secondhand clothing business nets a few billion each year, if the test is successful it’s sure to expand. ThredUp recently received $81 million from Goldman Sachs Investment Partners, according to Forbes, bringing their capital fundraising to a total of $125 million since it was founded in 2009. “In the U.S., we know that parents give away more than $8 billion a year of kids clothing,” said thredUP cofounder and CEO James Reinhart, illustrating his company’s opportunity. “But still, if you were to poll 10 people on the street to find someone who sold clothes on eBay, you’d be lucky to find half a person.”

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