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Sunday, December 13, 2020 Leer en Español

#RetailMadeMe Tik Tok Trend Blames Capitalism For Waste. It Should Blame The Government

Companies have all kinds of incentives to be charitable. Unfortunately, retailers often face regulations that force them to destroy their merchandise instead of donating it.

Image Credit: Twitter-@cncld4dncng

Kids say the darndest things, and these days they say them on TikTok, the popular video social media platform with 850 million active monthly users.

A new trend called #RetailMadeMe took off on the platform this month after one popular account asked users to reply with a time their employer forced them to destroy perfectly usable merchandise.

The trend seems to have struck a nerve as hundreds of videos sharing personal accounts began to pour in. Many of the users expressed anger, guilt, and feelings of frustration as they described their own experiences.

Commenters directed their disdain at corporations for such wasteful, selfish, and environmentally negligent practices. Some told of having to destroy clothing that merely needed a good wash or a button sewn on, and pointed out that these items could have been donated to women’s shelters instead of being cut up and wasted.

Many of the replies focused on retail specifically, but another category quickly took off with other users recounting their experience in the food industry. They discussed policies that forced them to throw good food away, even when they themselves were experiencing food insecurity or knew it could be given to those in need.

Notably, many of the responders included additional hashtags with their videos that expressed their scorn for capitalism, which they clearly seem to blame for these egregious practices.

These stories would be upsetting in the best of times. But as lockdowns continue to ravage our economy, and as millions of Americans are struggling to make ends meet as a result, it is unsurprising that these anecdotes have ignited a social media wildfire.

But, while the anger behind these videos is understandable, and while it is right to be critical of careless waste, it seems the majority of the social media users in this case haven’t done their homework.

It has become fashionable to blame capitalism for bad behavior and corruption as of late, at least among some demographics. But dig beneath the surface for even five minutes and you will typically find that the source of the problem is actually some government regulation.

Companies have all kinds of incentives to be charitable. It buys them good publicity, builds their brand, and buys them good will.

Such is largely the case with companies destroying their products instead of choosing to donate them, especially when it comes to food.

“A mix of federal, state and local laws,” wrote Harvard Law professor Jacob Gersen in a 2016 article for Time, “make it almost impossible to get food that would otherwise be wasted to those who could use it. If you donate food to someone and they get sick or even die, then you could be legally liable for their injury. That risk, however small, means that when choosing between giving away and throwing away food, the least risky choice is to toss it.”

Some lawmakers have recognized this problem and passed provisions that limit the liability companies face, but only if they go through a third party charitable organization first. That makes the donation process costly and time-consuming for busy business owners.

Furthermore, a 2014 report by the National Coalition for the Homeless found that 21 cities implemented additional regulations that block food-sharing with the homeless explicitly. One health department even went so far as to dump bleach on perfectly good barbeque (in 2016) when contestants of The American Royal’s World Series of Barbeque attempted to donate excess food from the event.

More often than not, it is bad government policy that leads to waste—not the free market.

On top of all of that are other laws, like occupational licensing, that prohibit everyday Americans from sharing excess food they may prepare or possess. Local health laws ban the direct donation of food items, especially if they are prepared in an unlicensed kitchen.

Regulators and government bureaucrats will attempt to say that all of this is done in the name of public safety. But that argument doesn’t wash. In fact, restaurants—which are stringently regulated—are twice as likely to give someone food poisoning compared to meals cooked at home.

Other retailers face similar government regulations that force them to destroy their merchandise instead of donating it.

CVS, which has garnered the particular attention of the #RetailMadeMe trend, responded to the criticism with a statement that expressed as much:

“We work with numerous nonprofit organizations to arrange for damaged or near-expired goods from our stores to be donated to people in need … Our product disposal guidelines and procedures comply with applicable state and federal regulations, and they are consistent with that of the retail industry.”

To be fair, there are other reasons companies choose to destroy goods, and for some of these they deserve criticism. Sometimes the policies are in place so that employees do not have an incentive to damage products (in order to get a reduced price or obtain them for free). And some companies, especially luxury brands like Burberry, destroy their leftover products so as to not decrease the value of their brand on the gray market.

In this regard, pushback from consumers works marvelously and applies pressure on these companies to adopt more sustainable practices. Such is the case with the latter where in response to condemnation, high-end brands like Gucci and Balenciaga have joined initiatives that convert raw materials into yarn for other fabrics and garments.

But more often than not, it is bad government policy that leads to waste—not the free market.

Companies have all kinds of incentives to be charitable. It buys them good (and often free) publicity, builds their brand, and buys them good will. It increases the morale of their employees, and they can usually write off the donations on their taxes.

So contrary to the assertions on Tik Tok, free market capitalism actually provides ample reasons for companies to be philanthropic. It’s time to stop blaming an economic system you don’t understand when the government is actually at fault.

  • Hannah Cox is the former Content Manager and Brand Ambassador for the Foundation for Economic Education.