Charity Shop Insurance and Risk Management

In Charity, Insurance, Risk Management by Static Author Display Name

Many charities accept donations of second-hand items in order to re-sell them to raise money for their organisation. The most common form of this is through charity shops, however, some organisations may sell at boot sales or jumble sales. In any case, charities should be aware of what’s required of them in order to sell certain items and what the insurance implications are.

Let’s begin with the basics…

What can you sell?

All items that are offered for sale must have been inspected and tested. This means that all electrical items, from small items like CD players and radios, through to large white goods like washing machines and freezers, must comply with current safety regulations, should carry the manufacturers trademark and should have operating instructions.

What can’t you sell?

Generally, any items with damage, cracks, missing plugs or leads or any other issues, should be avoided if there is any risk that the damage could cause an injury. In addition, because of the challenge involved in knowing the history, safety and condition of the items, you may consider not selling second-hand curtains, electric blankets, microwaves, fairy lights, cookers, furniture without legally-required labelling, any safety equipment or any items that may have been subject to a product recall notice.

Risk Management

Under the Consumer Protection Act, it is the retailer’s responsibility to ensure consumers’ safety. You should follow all regulations, which include inspecting and checking all items to ensure they are safe for resale; more advanced testing on some items such as electrical items and a exercising caution when selling certain items such as some children’s clothing with cords fitted.

You may consider logging and recording items that you receive for re-sale. Any pre-sale checking and testing should also be recorded; if you use specialists third-party service providers, such as electricians, you should record their details and evidence of each item being tested and ensure both yourself and your service providers have adequate insurance in place.

Insurance

If you’re selling second-hand items through a charity shop or any other method, you should speak to your broker or insurer about the cover you have. You will likely need Products Liability insurance; this covers you for the cost of a claim for injury or damage caused by a product you either supply or produce. However, when dealing with the sale of second-hand items, it is important that you check what you are covered to sell under your insurance policy and what requirements there are in terms of inspections, testing and checking. For example, if you fail to test an electrical item before selling and your policy stipulates that you must, then any subsequent claim relating to this item will not be covered.

For more information, read our Support Centre article on Selling Used Goods: Risk Management and Selling Used Goods: Insurance.