KOMO 4 Investigates: Donation Deception

KOMO 4 Investigates: Donation Deception »Play Video
SEATTLE - You pull up to a donation bin, and drop off clothing and items you no longer need. You think it's for charity, and most of the time, it is.

Now, a KOMO 4 News investigation uncovered a local business taking advantage of your good intentions to turn a profit. But their clothing bins never tell you that.

It's an emotional topic. Our camera at one clothing bin location makes a local businessman angry -- even though they're not his bins.

Reactions from other people?

"Very deceptive. I think it's kind of underhanded,"

It upsets and angers them.

"I think it's deceitful," says another.

Over the past year, more than 170 of these bins have popped up all over King and Snohomish Counties. The front of the bins say: "Proceeds from this bin benefit local non profits and charities." And the back reads, "Clothing, Donate here."

Allison Sheafe of Seattle brought used clothing to donate at one location and, "I assumed it was donations for the poor," she said. "I had no clue that it was for resale for profit."

It's not a charity. The bins are owned by Retex Northwest, a for-profit business.

"We have never said we were a charity," said Carolyn Forrester, Public Relations and Marketing Director for Retex. "We try to be as open and totally above board as we possibly can. We try to do the wording so that it isn't confusing."

But, donors were confused. Patty Vodopest showed up at a bin site after cleaning out her closets.

"I thought they were all the same," she said. "And, that really makes a difference to me. I'd rather it go for a charitable cause."

Everyone KOMO 4 News spoke with thought the bins were for charity. After all, it says right on them, "proceeds benefit non-profits and charities."

"I guess in my book I'm not thinking charity, I'm thinking recycling," said Retex representative Forrester.

But the word "recycling" isn't on the bins anywhere. But that's how Retex makes its money, recycling clothing. They sell used clothes and shoes overseas as part of a billion-dollar global industry.

"This process that we start rolling here," says Forrester, "by placing free bins at public sites for people to do the right thing with their clothing and shoes ends up putting many people to work."

But local charities tell KOMO 4 News the Retex bins are cutting into their donations, and hurting local people who need help.

"The donations come in and I see them go out so quickly that I know that we're doing a good job."

That's the impression of Sally Brunette, a volunteer at the Issaquah Food and Clothing Bank. The organization helps more than 40,000 people a year, the working poor.

The Issaquah clothing bank's back street donation center can't compete with Retex's bins located at highly visible strip malls and shopping centers.

"Everything that they are getting, they're selling," said clothing bank Director Cherie Meier. "Where everything that we get here is given to the families."

At Northwest Center, clothing donations are also sold, but they are sold locally. And Northwest Center uses that money to provide jobs and job training for hundreds of disabled adults.

"We're helping them to become employed," said Northwest Center CEO Dave Wunderlin. "We like to think of it we're helping them to develop whole lives."

Both charities say since the Retex bins showed up, they've seen a significant drop in donations.

Both worry they'll have to cut services because of it.

"There's no magical pill, there's no formula," says Wunderlin, "services just stop."

And what about that claim on the bins, that proceeds benefit charities? Forrester says, "We just don't happen to be a charity, but we do give to charity."

Here are the facts: In 2004, Retex donated to just three charities. To the Snohomish County Y they gave $250. Fire District One in Snohomish County recieved $500. And Retex gave $1,000 to Healing the Children.

A total of $1,750.

"But we have never, ever indicated that we are anything but a for profit organization," adds Forrester.

You could have fooled Fire District One. They let Retex place a number of bins at their fire stations. So did the Mukilteo YMCA. Both told KOMO 4 News they thought the bins were for charity.

"We were unaware RETEX was a for-profit operation. If we had been made aware of this at the time RETEX approached us... we would have never agreed to the arrangement," said Fire District One in a written statement.

"We are here to do good," says Retex's Forrester. "Not to mislead anyone and to really make a difference."

KOMO 4 News wants to make it clear that running a clothing recycling operation is legal. However, the state of Washington is now taking a closer look at Retex, and particularly the fine print on some of their bins.

On some it says they are a "licensed commercial fundraiser". But the state tells KOMO 4 News it has no record of this at all and that is a violation.

The Secretary of State is following up on our investigation.

If you have a story you want KOMO 4 News to investigate, drop up as e-mail at investigate@komo4news.com