The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 18

Advice columnist Ann Landers, in her column, has several times attacked a practice engaged in by some clothing retailers. They will slash or tear items they have been unable to sell, and throw them away, rather than give them to employees or low-income people. Ann was puzzled by this behaviour. The only plausible explanation she could think of was one suggested by a Nebraska reader: Stores are trying to protect themselves against people who will obtain such merchandise at no charge and then bring it back to the store for credit. Can you give her an alternative explanation?