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29 August 2014 20:12 (South Africa)
South Africa

Used goods: Will the new law work?

  • Khadija Patel
  • South Africa
khadija cash converters

Second-hand goods tell stories of their own. They speak of the romance and mystery of bygone times as much as they speak of the desperation that drives sectors of the second-hand industry in South Africa. KHADIJA PATEL visited Brixton, Johannesburg, to find out how efforts to regulate the second-hand trade have impacted business there.

Earlier this month, the full weight of the Second Hand Goods Act, tabled in Parliament way back in 2009, came into law. It’s meant to give the police more clout in dealing with the scourge of ill-gotten gains readily available in second-hand stores across the country.

Most significantly, this law equates possession of a stolen item with the act of stealing. In other words, the police have the right to arrest anyone caught buying stolen goods.

In March, police minister Nathi Mthethwa described the act as “an important tool in the effort to clamp down on stolen goods”. And away from the shenanigans of the upper brass of the South African Police Services, this law should aid the SAPS to get on with on with actual police work, fighting crime and putting the bad guys away.

Among other things, the act requires all dealers of second-hand goods to report to the police suspicious transactions where the seller attempts to provide false particulars, or where goods are suspected to have been stolen. Second-hand goods dealers and pawnbrokers will therefore not only have to take reasonable steps to ensure that they do not buy stolen goods or goods that have been tampered with, but also be careful from whom they buy goods. If an unscrupulous dealer is found guilty, a court can impose a prison sentence of up to 10 years. The onus, then, is on dealers to ensure the goods they sell are not the products of theft.

In Brixton, Johannesburg, second-hand goods dealers are less than enthused with the additional responsibility. Much like Hillbrow, the city’s more notorious pocket of crime and squalor, Brixton’s heyday lives in subtle hints of architecture and in the memory of its oldest residents. And just as Hillbrow is keenly populated by its own peculiar brand of businesspeople, Brixton too has become the hub of another breed of businesspeople: Bangladeshis plying their trade in convenience stores on every available corner, Ethiopian restaurants promising the delights of East African cuisine and, dotted among them, a slew of pawnbrokers, second-hand furniture dealers and a promise of cash for your gold. Jutting out awkwardly from this melting  pot is Brixton’s Protea shopping mall.

Inside the mall the trade thrives just as well as it does outside. The only difference is that inside the mall the second-hand store is branded in the colours of Cash Converters. The act is as applicable to this franchise and Cash Crusaders as it is to the smaller stores outside.

The act provides for industry bodies to be accredited, allowing second-hand goods dealers' associations to support the police in monitoring compliance through inspections and self-regulation. Cash Converters and Cash Crusaders have joined forces to form an association that will apply to the police for exemption from certain requirements of the act.

Peter Fouche, a Cash Converters executive, was loath to reveal exactly which parts of the act his business would seek exemption from. He stressed: “The areas in which we’ll seek exemptions are those that we are confident our internal processes ensure that we do not need the added safety of the act.”

So far, the most contentious requirement of the act is that a person acquiring goods from a dealer will have to provide their address, full name and a copy of their ID – a requirement Fouche said the as-yet unnamed association of Cash Converters and Cash Crusaders will seek to have waived.

He stressed, however, that the new act was actually not much different to its predecessor. The previous act (the Second-Hand Goods Act of 1955) saw regulatory powers fall squarely with the SAPS. The new act, however, allows for self-regulation within dealers’ associations. “It’s early days, we’re still considering the practical implications, but for us it’s very much business as usual,” Fouche said.

Cash Crusaders and Cash Converters together form the biggest arm of the second-hand goods industry in South Africa. They are organised enough to ensure their business goes on despite the new law. Smaller businesses, however, are more wary of the law.

Outside the mall, the managers of a store specialising in computer hardware are far less enthused by the act. They worry that it will cost them customers because it requires their customers to provide personal details. They believe people aware of the threat of identity theft will be reluctant to hand over copies of their ID documents but they insist their goods are all sourced legally.

A block away, a storefront decked out in yellow, beckoning pedestrians to sell their spare gold for cash, has resigned itself to the reality of the act. They already comply with the law by requesting the identity documents and contact details of anybody who does business with them.

Deon, the manager of the gold pawnbroker is one of the few dealers who is willing to be identified or speak about his business at all. For him, the act is already a part of his business, a reality that already has the local police checking up on his books.

“It’s just that business is so bad,” he says. “We struggle to even pay our rent at the end of the month and down the road the Nigerians are in the same business without a licence and with no worries about these checks.”

Nobody knows where exactly the Nigerians do their business on High Road. Deon claims he has no idea where they are based. The local police are similarly stumped. 

Sergeant Groenewald from the Brixton branch of SAPS is pleased with the reception the act has received in the area so far. He says a second-hand goods forum established at the Brixton police station was attended by roughly 60% of all dealers in the area and the police perform weekly cluster operations to check up on the compliance of local businesses.

The act is a substantial step towards stemming the flow of stolen goods in second-hand stores in the country, but it remains to be seen whether it will be just another piece of well-intended legislation wasted on poor implementation practices. In Brixton, there is a thriving second-hand trade. Much of it appears to be above board – business people trying hard to pay their rent and feed their families. But there is also an unshakeable aura of desperation shadowing these businesses, a desperation that may well not be regulated or policed into the submission of law.

In one pawn store, a maze of television sets leading to the counter could not conceal the look of sheer panic on the face of the man behind the counter. He whispered urgently to someone concealed from view to stay where he was and refused my exchange of pleasantries, demanding to know what I wanted. “It’s a white man who owns this shop,” he said in irritation, “I cannot help you.”

Outside, a beggar cupped her hands, curtsied and asked for R5. “We are suffering,” she said softly. DM


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  • Khadija Patel
  • South Africa


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