Fake Clothing Drop Bins Use Your “Charity” Donations To Make a Profit

New York City is suffering from a proliferation of fake clothing donation bins. The bins charade as legitimate receptacles for collecting items for charity, the New York Times reports. But they are not connected to Goodwill or other certified charitable center. Instead, the individuals who plant them turn a profit by selling the goods to used clothing stores or to overseas companies. Here's the Times:  

City law bans such bins from being placed on sidewalks and streets; they are legal on private property with the consent of the owner. Once found by Sanitation Department enforcement officers or reported by residents to the city’s 311 help line, an illegal bin is tagged and the owner has 30 days to remove it. Summonses are not issued, a department spokeswoman explained, based on the theory that those distributing the bins have factored any fines into the cost of doing business.

City officials said that although owners have 30 days to haul away tagged bins, they often simply move the receptacles a block away and start the clock ticking all over again.

According to the Times, New York tagged 91 bins in 2010. For fiscal year 2014, however, that number had skyrocketed to more than 2,000. But as the Times points out, this trend is not at all unique to New York. Similar bins have turned up in Michigan, Arizona, North Carolina and elsewhere. Last summer in Tampa, for example, "Boom! They're everywhere," officials told My Fox Tampa Bay. In that city, businesses whose parking lots harbor the phony bins said they were given a cut of the profits or just paid a flat rate.

The proceeds shady companies make from these bins are no joke. Back in 2012, USA Today reported on some of the values and volumes that for-profit "recycling" companies are dealing in: 

Collections and wholesaling has skyrocketed for Planet Aid in recent years. In 2007, it sold roughly $7.5 million of donated clothing and household goods. In 2011, that figure was up to $31.4 million, according to its most recent tax return filed with the IRS.

USAgain, an Illinois company that also collects clothing through drop-off boxes, is a for-profit recycler, and states as much on the 10,000 bins it maintains in 17 states, spokesman Scott Burnham said. The company collected 60 million pounds of clothing donations in 2011, he added.

According to My Fox Tampa Bay, clothing that is exported in bulk to international buyers was worth about 0.35 cents per pound in 2012, but that figure tends to goes up each year. When millions of pounds are involved, that figure quickly adds up.  

Legitimate charities, in turn, feel the loss. As AZCentral reports, one local charity's donations dropped from around $1 million in 2006 to less than $150,000 per year in 2010. While other factors such as the recession could be at play, the charity director thinks that the proliferation of fake bins are at least partly to blame. 

As a Goodwill spokeswoman told USA Today, "The charitable sector relies heavily upon the kindness of donors to help achieve their respective missions." The hope is that, as cities struggle to contain the fake bins, citizens will do their part by taking a moment to verify that their donation is indeed going to an actual charity.

Rachel Nuwer | | READ MORE

Rachel Nuwer is a freelance science writer based in Brooklyn.