Consumers look to Value Village for a bargain. Many are finding ‘ridiculous’ markups

While browsing the goods at a Value Village store in Toronto, Evan Boyce spotted something he didn’t expect: A used vase for sale with a Value Village price tag of $8.99. Then he realized the original price tag was still on — and to buy it at a Dollarama store would have cost only $3.

“Three times what it would have cost brand new …It’s pretty ridiculous, right? Just kind of feels like a rip off to be honest,” said Boyce, a 30-year-old who works for a renewable energy company.

For years, many Canadians have relied on Value Village to buy used goods for cheaper than other retailers. It’s one of the biggest and most popular thrift store chains in the country. Now some customers are accusing the company of massive markups on their items.

Massive markups

The examples of questionable pricing at Value Village have been piling up for months. In Courtenay, B.C., one shopper found kids shoes priced at $6.49, while the original tag said $3. A used book at a store in Winnipeg was being sold for double what it would have cost at its previous retailer.

Boyce voiced what many customers have been asking: “Most of what they have is donated. Why is there the need to mark it up so much?”

Shoppers have also recently called out the pricing practices of Goodwill and Salvation Army. These non-profit organizations compete with Value Village, which is a for-profit business owned by parent company Savers Value Village. U.S. private equity firm Ares Management is a majority shareholder, and helped take the company public last year.

The business model is pretty simple: All of its inventory comes from secondhand donations, some of which are collected by non-profit partners. Value Village pays those partners a flat rate for the goods, then sells them at a profit. The company now has more than 300 stores in the U.S. and Canada which brought in $1.5 billion US in sales in 2023.

Customers feel duped

The Value Village brand could suffer as a result of this recent backlash. Consumers mentally organize retailers into certain categories, explained Matthew Philp, a marketing professor at Toronto Metropolitan University. They expect thrift stores to be cheaper than regular stores, with the second-hand items sold there to be discounted because they are used.

Philp suggested questionable pricing like this can throw everything off for consumers. “It kind of breaks what we know to be true and how we think the world should work, and that’s just jarring,” he said.

Businesses all have different, complex pricing strategies, and there are few occasions where markups are against the rules. But Philp said companies can walk a fine line, as customers who feel duped by a retailer are less likely to return.

“We’re going to be a lot more cautious next time we buy.”

Buyer beware

As thrift store haul videos on Youtube and TikTok explode, the popularity of thrifting seems to be surging. Consumers are making an effort to shop more sustainably.

Many are also trying to save money as the cost of living soars. “It’s driving more traffic to the thrift economy, the second-hand economy,” said Kerry Taylor, a B.C.-based personal finance expert. “We all want to find the cool stuff for less.”

Value Village called out for massive markups

Deal hunters shopping at Value Village are calling out the second-hand retailer for charging prices way beyond what they say could be bought new elsewhere.

But in that kind of environment, Taylor said consumers need to be more price-conscious, perhaps doing more research online or committing to shopping around. “If you see something that doesn’t look like a good price, it’s easy to walk on and find something else new.”

Value Village responds

Value Village says thousands of items come through each of its stores every week, and that staff try to price products accurately.

“Customers should feel free to chat with a store manager if they think that an item has been inadvertently mispriced so we can quickly address it,” said Sara Gaugl, director of marketing at Savers, the store’s parent company. “We’d be more than happy to take a second look.”

Outside the Value Village in Toronto, shoppers like Daniel Milford-Warren say they’ll still hunt for a bargain.

“They’re going to try and maximize as much money from you as they can and it’s up to us to keep our money.”

CBC’s Marketplace and Streets Cents are teaming up to take a closer look into the Value Village pricing controversy. They go shopping for the truth on how the prices stack up against other big name retailers. Tune into Marketplace on February 16.