Money for old robes

"Thieving. That's what annoys me most working here," says Beverley Smith at the Save the Children charity shop in south-east London. "A lot of thieving goes on here. You put a good suit out for pounds 7.50 and someone steals the trousers the very same day. No one wants a suit jacket without the trousers."

It seems quite unbelievable that people should steal from charity shops, especially since the prices for most goods are embarrassingly cheap already. Then again, talk to many people about charity shops and they'll often venture the suggestion that all the best stuff is hived off by the staff.

I must admit, I have donated loads of black plastic bags to charity shops over the years, and I've never seen my stuff in the window. But Mrs Smith laughed when I suggested she might be pilfering my donated 1983 road atlas or murky beige Farah slacks created from a cocktail of man-made fibres that weren't even fashionable on the day of manufacture.

"Us taking things? We're sick of the sight of it all to be honest. If we do see something we like we pay for it just like a customer does," she says, waist-high in black dustbin bags stuffed with donated goods that she sorts through and prices daily. She concedes that sorting the goods is the hardest part, selling them is easy.

There are a number of reasons why a donor's goods may not be on display in the shop. Some charities have a policy to hold goods back for a few days in case the donor has second thoughts, some move stock to stores that get few donations. Clothes tend to be given at the end of a season, such as sweaters in the spring, and these are stored until a more appropriate time to sell. Obviously, some items are unsellable, but most charities manage to make money from almost everything, either by recycling textiles (Oxfam even has its own textile recycling plant) or offloading consignments to a scrap merchant.

"Charity shops are very environmentally friendly," says John Tough, head of the retail division at the British Red Cross. "Fewer new clothes have to be made so there are savings on imports, raw materials, and fossil fuels to drive the machinery. And we serve a need in the community, providing low-income families with clothing at low prices.

"In this area we get exceedingly good donations. We've got a lot of wealthy people in Henley," says Mary Hoskins, manager of the Imperial Cancer Research Fund's shop in that Thames-side Oxfordshire town. Despite the local wealth, this shop also suffers from shoplifting. "Absolutely disgusting, it's like stealing from your own mother," says Hoskins. The shop has a turnover of around pounds 115,000 a year, and unlike her 41 volunteers, Hoskins receives a salary.

The Henley shop has far less trouble obtaining good quality donations and big buyers than does Beverley Smith's shop in south London. "We received six bags this morning, including eight immaculate designer dresses, perfect for Henley Week. I can get at least pounds 60 for a good dress,'' Hoskins beams. By contrast, Mrs Smith had received no donated goods that day, only someone arguing over a button falling off a pounds 2 dress she'd just bought.

So what would a dream list of donated items be for your average charity shop? Unanimously, they ask for good-quality clothes, especially women's clothes. "That's what makes the most income, that's where the competition is fiercest," says Linda Arnold, operations manager at Save the Children. "Also good quality bric-a-brac and books. We often find people buy a book and then bring it back, we're like a mini-library. In university towns we do well with household items. The new students buy it to get through the next few years, and often donate it all back when they leave university. For summer balls they'll buy things like evening gowns. Often we find a garment like that doing two or three trips through the shop."

Things most charity shops don't want, especially in these litigious times, include anything that could fall foul of health and safety laws or that is bulky: perishables, gas appliances, children's car seats and shoes, riding hats, crash helmets, nursery equipment and cosmetics. Many stores won't accept electrical appliances unless they have access to someone qualified to test them. Few, except Oxfam, accept furniture.

Many shops have to pay to dispose of things they can't sell. The council charges 35p for each bag it takes away from Mrs Smith's shop. Even so, such costs are often easily absorbed. The public face of charity shops may be a couple of old dears grappling with such new technology as decimal coinage, but a survey last year by NGO Finance unearthed trade figures that would make any captain of industry proud: 4,542 UK shops contributed pounds 67m in annual profits on a turnover of pounds 247m. The biggest earners were Britain's 850 Oxfam shops - very few chain stores have more outlets - and each shop nets an average profit of pounds 418 a week.

Such success has increasingly led, despite the philanthropic intentions of charity shops, to widespread resentment from many small businesses, jealous of the mandatory 80 per cent cut in business rates that charity shops enjoy. A number of businesses are even mean-spirited enough to complain that charity shops steal their trade.

But it's not just local businessmen that today's charity shops have to contend with - it's themselves. In the last few years, such shops have been opening at a ferocious rate, which has led to extremely fierce competition for donated goods and volunteers.

"Boot sales have also really affected donated goods," explains Mrs Smith, rashly putting 25p price stickers on some James Last, Richard Clayderman and Chris de Burgh cassettes. "We used to get stuff good enough to go to auction, but not now."

Some staff simply don't know the cream from the dross: many charities don't give their staff much or any training in valuing items correctly, apart from a handful of basic guidelines. It's no surprise, then, that treasure slips through the net.

"These people don't know what they're selling, they haven't got a clue," says male model Phil Anderson, 30, on a regular shopping trip to his local Greenwich charity stores. "I've just been to Mencap and bought a Dunhill denim blouson, which retails for about 150 quid. They're selling it for six quid. I buy Marks and Spencer shirts for pounds 2.75 all the time, all washed and ironed for you. At that price you could wear them once and then throw them away."

Anderson is surprised at how stock can vary so considerably from area to area. "I found Kensington was bad, while Brighton and Bromley are good. At a Chiswick shop it looked like a wife had had an argument and dumped all her husband's clothes. I paid pounds 20 for about a thousand pounds' worth of stuff," he says.

Despite such problems, the underpricing of goods and increased competition for customers, donations and volunteers, the Red Cross's John Tough is very optimistic about the future. "Only 51 per cent of the adult shopping population has ever bought anything from a charity shop, so 49 per cent haven't used them. There's a vast untapped market out there," he says, with undisguised gleen